1 221 

14 

>py 1 



.SSACHUSETTS BUEEAU OF STATISTICS OF LABOE. 



The Causes of High Prices. 



Part IT of the Annual Repokt for 1904. 
Pages 79 to 130. 



CHAS. F. PIDGm, Chief. 

FRANK H. DROWN, First Clerk. WM. G. GRUNDY, Second Clerk. 




<A. 




BOSTON : 

WRIGHT & potter PRINTING CO., STATE PRINTERS, 

18 Post Office Square. 



co]S'te:nts 



Distribution of letters, 




Number of replies received, 




Kinds of business represented 




Opinions of correspondents, 




Arms and ammunition, 


84 


Artisans' tools, . 


84 


Carriages and wagons. 


85 


Clocks, watches, and 




jewelry, . . 


85 


Clothing, 


85-87 


Coal, .... 


87, 88 


Coffee, 


88 


Drags and medicines, 


■ 88 


Dry goods, . 


88-91 


Electilcal goods and 




construction, . 


91,92 


Fish, .... 


92 



THE CAUSES OF HIGH PRICES. 

Newspaper and magazine articles on prices of necessaries of life, 
Investigation by Bureau to learn causes of high prices, 
Circular letter of inquiry. 



Flour and cereals. 

Fruit and canned goods, 

Groceries, ... 

Liquors and beverages, 

Machines and machinery 

Meats and provisions, 

Metals and metallic goods 

Paper, 

Rents and real estate, 

Rubber and elastic goods 

Shoes, 

Textiles, 

In general, 



Summary, 

Causes of high prices classified, .... 

Price comparisons, 

Information relating to agricultural exports, . 

Statement from the Monthly Summary of Commerce and 

Finance of the United States, 

Extract from Report for 1901, 

Why Living Costs More ? New Haven Register, 

Business Prospects and Costs of Production. New York 

Journal of Commerce and Commercial Bulletin, . 

Vt'&ges, 

Earnings, 

Cost of living, 

Prices, 

Comparisons of wages and cost of living, . 
Comimrisons of earnings and prices, .... 

Future work of the Bureau, 

Conclusion, 



rage 

81 

82 

82 

82,83 

83 

83 

83-113 

92, 93 

94,95 

95-97 

97 

97,98 

98-103 

103, 104 

104 

104-109 

110 

110, 111 

111 

111-113 

113-130 
114, 116 
115-117 
118, 119 

119, 120 
121, 122 
122,123 

123. 124 

124. 125 
125-128 

128 
129 
129 
129 
129, 130 
130 



..Approved fis ffHR Staks ^qaaq of Publication. 



THE CAUSES OF HIGH PRICES. 



[79] 






OCT 15 1904 
D. of 0, 



The Causes of High Prices. 



In newspaper and magazine articles * and public addresses, 
during the past year, the statement has been made, and reiter- 
ated, that the prices of the necessaries of life are much higher 
now than in previous years. Such being the fact it follows 
that all classes of the population are placed at a financial dis- 
advantage unless the increased cost of living is accompanied 
by adequate increases in wages, salaries, and profits. 

The numerous strikes of workingmen show that they have 
adopted this method of securing an adjustment of income and 
outlay, while dealers and manufacturers have reduced expenses, 
salaries, and wages as a means of equalization. As a rule, 
the salaried man has found it impossible to greatly im- 
prove his condition, for he can gain little by striking and his 



* The Coot of Living, Boston Advertiser, Oct. 19, 1903; The Cost of Living, Boston Post, 
Nov. 22, 190.3 ; The Cost of Living Does Not Go Down with Wages, Paterson, iV. J , National 
Labor Standard, .Jan. 2, 1904; War Raises Prices of Food and Textiles, New York Times, 
March 6, 1904; The Cost of Living, Pittsburg, Pa., Labor World, March 17, 1904; The Price 
of Bread, Boston Post, March 19, 1904; Some Interesting Figures, Cincinnati, 0., Zeitung, 
March 19, 1904 ; Ln Re Bread, Boston Transcript, March 22, 1904 ; The Price of Flour, Boston 
Transcript, March 24, 1904; The Coal and Bread Problem, Chicago Tribune, March, 1904; 
A Word for the Consumer, Boston Post, April S, 1904; The Cost of Living, Sunday Trades- 
man, Springfield, Mo., April 9, 1904; The Price of Bread, N. Y. Banker and Tradesman, 
May 14, 1904; The Cost of Living, Boston Globe, May 19, 1904; What Has Been the Effect 
on the Working-man of the Shortened Work-Day? Boston Globe, June 5, 1904; Secretary 
Shaw's Philosophy of High Prices, Boston Transcript, June S, 1904; The Cost of Living, 
Boston fosi;, June S, 1904; Living Expenses, Boston Posf, June 9, 1904; For High Prices, 
Boston Herald, June 9, 1904; More Facts and Figures, Clet'eland, O., Citizen, June 10, 1904; 
Does Prosperity Make High Prices? Boston Globe, June 12, 1904; Business Prospects and 
Cost of Production, N. Y. Journal of Commerce and Commercial Bulletin, .June 16, 1904; 
The Advance in Meat, and Why? Springfield, Mass., Pepublican, .June 20, 1904 ; The Higher 
Cost of Living, The Railway Clerk (magazine), July, 1904; The Cost of Living, Pittsburg, 
Pa., Labor Tribune, Aug. 4, 1904; Wages, Cleveland, Ohio, Citizen, Aug. 6, 1904; Prices 
of Commodities, Springfield Rejmblican, Aug. 7, 1904; Wages and Cost of Living, Boston 
Post, Aug. S, 1904; Wages and Prices, Boston Globe, Aug. 8, 1904; Wages and Cost of Liv- 
ing, Boston Herald, Aug. 8, 1904; Wages and Living, Boston Post, Aug. 9, I'.Mil; The Cost 
of Living, Boston Traveler, Aug. 9, 1904; Wages and Cost of Living, Boston Herald, Aug. 
10, 1904; Cost of Living, Boston Post, Aug. 10, 1904; Wages Here and in Europe, Springfield 
Republican, Aug. 10, 1904; The Exportation of Wheat, Springfield Rejmblican, Aug. 12, 
1904, among many others. 

[81] 



82 STATISTICS OF LABOK. [Pub. Doc. 

readjustment must come from a reduction of his personal ex- 
penses. 

To compare prices of articles of personal or house consump- 
tion accentuates the existing conditions, but gives no relief or 
promise of improved conditions. Comparisons of the cost of 
living of a number of families supply proof of increased outlay, 
but contain, in themselves, no panacea. In fact, the conditions 
of different families vary so materially that such comparisons 
are of little value. If two families of the same size and re- 
quirements could compare expenses, on the same plane of 
living, for a number of years, the deductions from their budgets 
would be, in a way, of value. Or, if the same family, the 
size, requirements, and plane of living remaining the same for 
a number of years, should keep expense accounts the results 
would supply bases for comparison. And, yet, these results 
might not indicate the condition of the great mass of humanity, 
but have only an individual value. 

It is not the object of this article to consider })riccs in a 
detailed comparative ^vsly, or their influence on the cost of 
living. There can be no effect without a cause, and as the 
existence and effect of high prices have attracted so much 
public attention an attempt, at least, to learn the cause or 
causes of high prices seemed a legitimate and needed investi- 
gation by the Bureau. 

After careful consideration, the plan of action decided upon 
was to address a circular letter of inquiry to the leading busi- 
ness men of the State. A copy of the letter which was sent 
out follows : 

Many articles have appeared in print, and many statistical tables have been presented 
in official publications, relating to High Prices, but in none of them has there been given 
what may be considered as a sufficient explanation of the reason for the advance in price 
of the necessaries of life. 

Why have the prices of groceries, provisions, meats, fish, vegetables, and other articles 
of food increased? Why have boots and shoes, clothing, dry goods, and articles of wearing 
apparel risen in price? Why are coal, wood, and rents higher than in previous years? 

Will you kindly favor this department with your opinion on the subject. Your answer 
may be written on this sheet and returned to us in the postpaid envelope accompanying. 
The names of persons supplying information will in no case be printed in the report. 

A prompt reply will place the Bureau under increased obligations to you. 

The number mailed was 664. The distribution is shown in 
the table which follows : 



No. 15.] THE CAUSES OF HIGH PRICES. 



83 



Classification. 



Number of Let- 
ters spnt to 
Specified Locali- 
ties 



City of Boston, 
Other cities, 
Towns, . 

Total, . 



604 
40 
20 



As will be seen, the gi'eater part of the letters were sent to 
Boston addresses, but many of them were answered by persons 
doing business, or residing, outside of Boston. 

The number of available replies received was 151, or 22.74 
per cent of the whole number sent out. If all had answered, 
it is probable that no wider range of opinions would have been 
received. 

The kinds of business conducted b}"^ those answering, and 
the relative number of answers, are oriven in the followinsf 
table : 



Kinds of Business. 



Arms and ammunition, . 

Artisans' tools, 

Carriages and wagons, 
Clocks, watclies, and jewehy , 
Clothing, . . . . ' . 

Coal, 

Coflfee 

Drugs and medicines, 

Dry goods, 

Electrical goods and construction, 

Fish, 

Flour and cereals 

Fruits and canned goods, . 



Number 

of 
Replies 



Kinds of Business. 



Groceries, .... 
Liquors and beverages, . 
Machines and machinery, 
Meats and provisions, " . 
Metals and metallic goods, 

Paper 

Real estate, .... 
Rubber and elastic goods, 

Shoes, 

Textiles 

In general, .... 



Total, 



Number 

of 
Replies 



1 

7 
22 
'4 
1 
13 
3 
6 
1 
12 

151 



Space will not permit the printing in full of the comprehen- 
sive and interesting opinions as to the Causes of High Prices 
expressed by our correspondents. We present, therefore, 
under headings showing the business of the writers, condensa- 
tions of their replies in which we have endeavored to retain 
the important points of opinion or information contained in 
them. It should be borne in mind that in some cases the 
writers consider only articles in the lines of business in which 
they are engaged, while in other instances the answers relate 
to several or all the points contained in the original letter of 
inquiry. 



84 STATISTICS OF LABOR. [Pub. Doc. 



Arms and Ammunition. 

STo. 55. Potatoes that used to be raised without labor, save planting and possibly one 
hoeing and digging, now require labor every two or three days, or else they are eaten up 
by potato bugs. Last j^ear was so cold that corn did not mature and I know personally of 
acres that were cut for fodder that ought to have ripened under ordinary circumstances. 
Of other grains, the export trade is taking considerable, and oats that used to sell for 45 
cents are now GO cents and hardly as good quality. There is no question but what the 
trusts have advanced prices in some cases beyond what they actually need, owing 
to the very large capitalization of several concerns. So far as boots, shoes, clothing, 
dry goods, and articles of wearing apparel are concerned, not one thing that the writer 
weais is, so far as he knows, a penny higher than it was five years ago. He can buy the 
same stockings, the same if not better shoes and hats and collars and shirts for as little if 
not less money; as regards suits of clothes, he happens to be of such proportions that he 
cannot buy them ready made, but he does not have to pay anything more for custom made. 
Why other things cost more in 90 per cent of the cases is owing to labor unions. In regard 
to coal it is no higher to-day than it was two, three, or four years ago ; last year on account 
of the strike it was higher. Wood is about the same, although during the strike it went up 
out of sympathy for coal. So far as the writer is aware there has not been any advance in 
the rates of rents. Of the two we think they are fully as low as they were. If they are 
higher it is because the people are demanding everything that modern appliances will give 
them. 

There never was a time, and in the writer's opinion there never will be a time, in the 
history of Massachusetts when the people were so prosperous and so happy and contented, 
when the man working at the bench or outdoor labor did so much to build up cities and 
towns as from fifteen to twenty years ago before the labor unions were known to any extent 
in the East. When we are going to return to those days, if ever, the writer cannot foretell, 
but so sure as we live we have either got to do it, or things are going to be much worse, yes 
ten times worse than now, if the people do not prevent it before coming to that condition. 

Artisans' Tools. 

Ko. 54. Two reasons which might be given for the increased cost of necessities of life 
are as follows : 

First : The increased cost of handling them. 

Second : The fact that dealers, being obliged to pay more for necessities which they buy 
to make a living, must raise the price of necessities which they sell. 

Referring to the first would say that it seems to me an undisputed fact that wages per 
hour have been increased to coal handlers, clerks, etc., within the past few j'ears and their 
hours of labor shortened. This makes it necessary for the dealer to raise his prices. 

Referring to the second reason it seems to me, generally speaking, that an increase in 
the price of one thing has a direct tendency to increase others. For instance, if a grocer 
finds that his meat and coal are costing more than at a previous time, he very likely will 
put up the prices of his groceries, and in some instances he may be compelled to or go out 
of business. 

No. 71. Our president has requested me to make reply and would say that in our 
opinion the reasons are three. 

First : As education improves the masses, they demand better articles and are willing 
to pay for them. This makes the demand which any business man prefers to meet and 
will endeavor to hold prices for. 

Second : The rates of rent, etc., are dependent upon increasing tax rates which in turn 
are forced upon the people by the reduction in hours of work demanded by the labor unions. 

Third : The encroachment of the labor unions and their unjust demands regarding labor 
and compensation make it practically impossible to manufacture goods at the old price and 
make a profit. As it is useless to run business without profit it is obvious that prices must 
be raised to meet the increase in wages. If the labor unions were willing to break even on 
these matters, things would be different. As it stands to-day every manufacturer feels that 
he must make all that is possible in the present, for the future is more uncertain than ever 
before. Of course, this again reacts to a certain extent in favor of the unions, but the re- 
action they do not turn to their interest. It is our personal opinion that you can lay 99 per 
cent of the blame upon the labor organizations and the defensive methods employed to 
fight them. 



No. 15.] THE CAUSES OF HIGH PRICES. 85 

Carriages and Wagons. 

No. 18. Short working-hours and higher wages are responsible. 

Jfo. 65. First: The increased demand arising from the very great improvement in 
business in 1897 and 1898. The boom following this caused a great demand, which would 
itself naturally stiffen prices. 

Second : The above was talien advantage of by capitalists in certain lines, notably, coal, 
oil, and steel, which could be controlled, and the prices were rapidly put up to what the 
trattic would stand. 

Third : The rise of the labor boss. We put it that way rather than saying the results of 
labor unionism. This is the most disastrous and reached a far larger number of people 
and a greater number of products. There was a tendency all along the line, from the first 
boom in business, for all employers to give the unions whatever they demanded, and this ran 
the cost of many important articles far above the normal, and above what the public could 
stand. The increase of prices under this head is more disastrous than that of the capital- 
ists, because they can reduce their prices promptly, when necessary, or when the demand 
falls off, and thus, to a great extent, keep their goods moving. The arbitrary rise of prices 
by the labor unions, however, is more inflexible, and in our opinion the large amount of 
money kept from investment and circulation on this account is the principal cause of the 
present business depression. 

Clocks, Watches, and Jewelry. 

Sio. 49. In our opinion the matter is largely due to higher prices for labor, and shorter 
hours for work. In a great many lines wage-earning classes, have secured increased com- 
pensation, and decreased working-hours, and to some extent this would certainly affect 
prices. 

No. 47. First : The wage worker is receiving more for his labor, and consequently the 
articles referred to cost the manufacturer more to produce, and in order to make the same 
margin of profit the manufacturer advances his yirice. 

Second : There is a community of interest among manufacturers for self-protection in 
many lines of trade, which induces the manufacturers to charge as much for their products 
as the consumer will pay. For example, no one doubts that the public is paying the cost 
of the coal strike in the price charged now for anthracite. 

Wage workers exact more pay and shorter hours, and then wonder why all kinds of 
manufactured articles cost more than they used to; never apparently considering that in 
reality they are paying the bills themselves, as they form a very large part of the consum- 
ing public. 

Clothing. 

No. 259. Three hundred days' work a year for any man that wanted it instead of two 
hundred days' work, besides material increase in wages, gives the purchasing power of 
the people such an increase that all raw materials have increased in value, owing to the 
great demand for same. 

No. 480. Concentration of control of a large portion of the products and speculation. 

In the writer's business, considerable quantities of cotton goods are used, and the spec- 
ulation of the past year in cotton has rendered unstable business in which this staple is 
largely used. 

No. 463. The increase in cost of goods in our line is very small, say from 2i,l> to 5 per 
cent, occasioned by the increase in cost of labor. 

No. 449. We know that clothing prices are no higher. 

No. 452. This condition is due to the increased wages that now obtain in all classes of 
labor. 

By increased wages, we include not only the higher price per day paid to the working- 
man generally, but also the shorter hours he is employed, which of course is as vital a 
factor in increased cost of production as the actual increase in cash outlay. 

This rise in productive cost is met by advanced prices all along the line, so that by the 
time an article reaches the consumer its price is just so much higher as the increased cost 
of production makes necessary in order that business may be done at a safe margin of 
profit. 



8Q STATISTICS OF LABOR. [Pub. Doo. 

Bfo. 471. Woolens are higher than they have been for some time. Labor ia a great 
deal higher now than it has ever been in this line, and the retailer marks his goods higher 
than he ever did, owing to the mark-down sales which he has to have every season, to get 
rid of his goods, at the end of the season; ready-made clothing to-day changes in style 
every six mouths, and years ago, a suit, or an overcoat, carried over to the next year, was 
wortli as much as the year before, and now it depreciates sometimes fifty per cent. Thus 
the reason for his marking his goods so high the first of the season. He is obliged to do it, 
to make himself whole. 

Bfo. 490. The advance in wages for making up clothing increases tlie prices of sale." 

Ho. 405. The rise in the price of tlie necessary commodities, that is the increase in 
cost of living, is, we think, due in the first instance to the advanced cost of labor. Taking 
as the most favorable instance, the price of coal, we are all able to appreciate the effect of 
the labor disturbances on present prices. A commodity in a class does not fall or rise 
alone in price; it carries its relatives along with it by an economic power. We don't 
consider under-production or the tariff as elements. The same cannot be said of specula- 
tions in foodstuffs, though fluctuations through their influences are nearly alw.ays 
temporary. In conclusion, labor, by its methods, is raising tlie cost of commodities all 
through the United States. 

Ko. 451. Prices in general have advanced on account of the shorter work-day and 
higher price paid for labor. In some cases, as meats and coal, it is due, in part, to the for- 
mation of combinations to control the market. 

Jfo. 448. I am convinced that two causes contribute principally to this condition, 
viz: — 1st, the extreme price of labor in manufacturing and building operations and the 
limitations placed upon production by organized labor. 

2nd, tlie operation of over-capitalized combinations that control the production, trans- 
portation, and sale of many of tlie great staple products of the country and also the high 
protective tariff on wool, leather, iron, and other raw materials used in our manufacturing 
industries. 

No. 464. Trusts, with their monopolies, and labor unions, with their strikes and un- 
reasonable demands. 

No. 487. My opinion is that the great advance is on account of the trusts or agree- 
ments among the large and wealtliy corporations which are able to control prices. 

The price of flsli depends largely on the elements and the inability at certain times to 
obtain sufficient quantity to supply the demand which is caused by the increased price of 
meats. As regards lobsters, it is well known that the laws in regard to the sale and capture 
of short lobsters are not enforced. 

Vegetables are largely dependent upon weather conditions and the destruction by insects. 

Boots antl shoes, dry goods, and articles of wearing apparel are not higher than they 
have been for years. 

Coal is higher on account of the same control as meats. 

Wood is higher because the price of coal is beyond the reach of the poorer people. 

Rents are not higher than thej' have been for years, excepting in cases where increased 
and expensive accommodations are called for. 

No. 441. In our own line prices are the same with e.xception of cotton duck. Our rent 
is rendered at old rates. 

No. 808. Vegetables — the farmer does not get too much — the middleman does. 

Meat — ask the meat trust which makes the price. 

Boots and shoes — from our standpoint there was never a time when good ones could be 
bought as low as to-day. Twenty to forty years ago we paid from $S to $12 for no better 
shoes than we can buy to-day at $3. .50 to $5. 

Di-y goods — calicoes, bleached, and brown cottons were never so low as now. Just this 
season the speculation in and shortage of cotton has raised the price a little. The retail 
price of prims in old time was 121/2 cents. To-day, or last year in normal times, the same 
could be bought at six to eight cents. 

If other kinds of dry goods are higher it is due to the exorbitant demand of the retail 
dealer. The jobber gets an average profit of not over 10 per cent ; the retailer not less than 
50 per cent and oftener 100 per cent. On some things they are obliged to get a large profit, 
the styles change so often. But the large retail dealers in all cities get rich. 



No. 15.] TPIE CAUSES OF HIGH PRICES. 87 

Coal — Mr. Baer says they get all the public will stand — and the public have nothing to 
say about it. 

Rents — are higher because cities and towns are always increasing the valuation. 
Anotlier thing, it costs a great deal more to build than ever before. The laborer by work- 
ing eight hours (and as a matter of fact he loafs 25 per cent of that time) together with his 
increased pay makes his work cost 100 per cent more than formerly. Then again the man 
who is not worth over SI a day gets the same as the one who is worth $5 and the public 
pays for it. 

No. 885. First : Tlie unrestricted speculation in such necessities, cornering the market, 
thus forcing the public, in order to get a supply of the necessity, to pay the speculator a 
large profit. 

Second : The combination of capital, called trusts, formed to eliminate legitimate com- 
petition, thus enabling the dealers to get large profits. 

Third : The organization of labor, enabling it to secure better wages, thus making what- 
ever organized labor enters into cost more than formerly. 

Fourth : The great and far reaching influence these combinations have upon the public 
by their success in accomplishing the result sought for, by squeezing the consumer for tlie 
benefit of those belonging to the combination ; all this stimulates the individual to try and 
accumulate money faster; to get all the profit possible and thus increase their financial 
holdings, enhance their prospects of coming into closer touch or assimilation with the 
successful speculator, the trust magnate, or Xapoleon of finance. 

Jfo. 465. Provisions have undoubtedly been advanced by trusts and combinations. 
Other articles such as fish, poultry, etc., have advanced in sympathy. 

Boots and shoes and woolen clothing are higher to-day than they were a few years ago 
by reason of the higher duties on the raw material such as hides and wool. All manu- 
facturers of cotton have advanced the price in the past few months by reason of last year's 
small cotton crops and also by stock manipulations. 

It is almost unnecessary to state why coal and wood have advanced. There is only one 
reason and that is because coal has been arbitrarily advanced by the coal trust and wood 
used for firing ])urposes has advanced in sympathy. 

Rents have advanced on account of higher prices being demanded for building material 
and labor. 

Sfo. 88. Referring to your letter of the 28th will state that every one has a different 
opinion on the questions which you placed to us. We find that the change in prices is done 
by the unions; in our case we have to pay the same wages to a man with no experience 
that we pay to an experienced man. One man may finish five dozen (of our product) a 
day; another man may be able to finish eight dozen a day, but the man who does only five 
dozen receives the same pay as the man who finishes eight dozen. You can readily see 
how the price of the article is raised. We find when buying our merchandise that it 
amounts to the same thing; when one article rises in price, it compels all the rest to do so. 

Coal. 

No. 535. Three years ago we were paying wharf laborers and one-horse teamsters 
$9 a week without extra pay in case of overtime. We are now giving these men $12 per 
week, allowing them a half of each Saturday for six months during the year, and paying 
them 30 cents an hour overtime. These changes make an increase of more than 50 per cent 
in tlie cost of labor. We also find that we are paying more for our wagons, shovels, 
harnesses, and general repairs than formerly. In consequence of the frequent change in 
price of coal, it is diflicult to determine what increase has really been made in cost. In 
1853, the price of coal was 87 per ton; in 1865, $17; in 1869, $10; and in 1875, $9. Since 1830, 
there have been but two years, 1895 and 1898, when coal was not sold at $6 or more at some 
time during the year. 

It is very interesting to note the improvement in the condition of labor within the past 
fifty years; in 1850, we paid $5 per week for 12 hours per day, frequently working until 10 
o'clock Saturday nights without thought of extra pay for overtime. At that time, the cost 
of flour, sugar, molasses, illuminating oils, boots and shoes, coal, and many other articles 
was higher than at present. 

No. 588. There has undoubtedly been a very large increase in the wages of employees. 
This is particularly true in the coal regions, where wages have advanced thirty to fifty per 
cent in the last few years. For instance, our scale rates for mule drivers, which are 



88 STATISTICS OF LABOR. [Pub. Doc. 

nothing but large sized boys, are $2.40 a day, and other labor in proportion. I think this 
is 80 in other commodities. The price of labor has increased heavily. 

Again, we have become an enormously big country and our consumptive capacity has 
increased with great leaps and bounds. There was a time when it was well beyond our 
ability to produce, but during the past year we have produced more than we consume, and 
the prices of most commodities are lower, but not as low as in pi-evious years. 

JTo. 533. In a general way, the advance in prices seems to us largely owing to the 
tariff, and high price of labor in this country caused by labor unions. 

Jfo. 532. Soft coal is selling to-day at shipping port at from 90 cents to $1 per ton less 
than last year at this time. 

Wo. 511. The high price of coal in a great measure is due to the increased cost of 
supplies, such as hay, grain, machinery, etc., also to the increase in wages, and shorter 
hours of labor. 

No. 587. The advance in prices of anthracite coal is chiefl.v due to the increased cost 
of production, which has been great during the past few years. The increased cost of pro- 
duction is due cliiefly to the large advances that the mine owners have Ijeen obliged to pay 
for labor, and also to the fact that practically everything used in connection with the 
mining of coal has increased in price. 

Coffee. 

Bfo. 196. Wages have not risen in general business for the reason that as the country 
grows older and more tliickly settled, competition has increased, and it has been growing 
from year to year harder all the time to make money. 

Where organized labor has been able to force the employer to pay increased wages, we 
have witnessed the result that the increased cost of all work performed by said organized 
labor is curtailing operations in their respective lines. 

Drugs and Medicines. 

No. 91. We And in our own department of drugs, medicines, and chemicals, any 
advance that has occurred in the last live years is to be explained by the reason of advance 
in cost of labor. In our establishment we find the expense for labor has nearly doubled. 

Dry Goods. 

No. 314. The first cause of the general advance in the prices of necessities of life lies 
in the fact that people in all stages of life are living in a state of greater refinement, and 
that that stjite leads them to call for more goods of the better class, and has gradually 
transformed what but a few years ago were luxuries into present necessities, and that 
the supply has not kept pace with the demand along these special lines. 

Common vegetables, fish, and meats may not, in the abstract, be more luxurious than in 
former years, but better selections in each of these items are demanded, and moreover, 
the producers of all these items, under the pressure of higher priced labor, better dwellings, 
better clothing, and a general desire to live more liberally than men of this class were 
living in the preceding generation, are stimulated to get higher prices for their products. 

Further, the increased wealth of the country, and the present enormous amount of 
circulating medium, leads to an increased demand for secure investment. Of course, 
real estate is deemed especially advantageous in the line of security. This leads to higher 
rentals and higher taxes. These, although placed upon the properties themselves, must 
ultimately be paid by the consumer. All of this is a natural sequence to what is termed 
" good times," and is only checked when dull times or bad times recur. 

A second cause, in my estimation, is the abnormal inflation due to the demands of 
exaggerated capital, usually in the form of watered stock. The fact that an enormous 
number of the industries of the country now float capitalizations ranging from two 
to twenty times the absolute and unquestionable needs of the corporations or trusts 
maintaining such industries, naturally leads to prices that are high in the abstract, under 
the most favorable conditions, and which become relatively higher and higher as times 
X)ass from good to bad. 

The attempts to maintain high prices in order to pay dividends upon watered stock 
become more and more desperate, and their injustice becomes more and more apparent- 
and relief can only come in one of two ways : Either by radical legislation, or by general 



No. 15.] THE CAUSES OF HIGH PRICES. 89 

depressions so severe as to lead up to the collapse of the iuttated companies. As yet, 
neither of these remedies is apparent, although there are tendencies suggesting a coming 
application of both. 

Ko. 258. Trusts and combinations protected by a practically prohibitory tariff, and 
-assisted by special legislation, are, we tliink, responsible for tlie conditions mentioned. 

No. 863. We believe the general advance in prices is due to increased business activity, 
to improvement in monetary exchanges, and to the reduced value of the precious metals 
resulting from increased production. The latter factor is likely to continue prices on a 
high basis until conditions cliange. 

We deal chiefly in cotton goods. The special advances in these have been due to the 
failure of the crops of raw material in 1902 and 1903. Plain cloth has at no time sold on a 
parity with the cost of raw material, but the somewhat increased price obtained has cur- 
tailed the demand seriously until now the mills are oljliged to stop production, being able 
to sell but a fraction of it at a loss of from five to 10 per cent. Dyed, printed, and otherwise 
finished goods have at no time reached a parity with the market value of the cotton cloth, 
and the margins ofvproflt secured by jobbers and retailers have also been quite unsatisfac- 
tory. 

Jfo. 833. There is no question but that the pricesof many kinds of dry goods for several 
years have been too low and could not be manufactured so that the manufacturers have 
received satisfactory returns in wajf of profits. The inflated price of the raw material has 
lately caused an advance in cotton goods, but the tendency now is back towards former 
prices. The causes which govern prices in our lines are unknown to us, though we might 
venture to express the opinion that the actions of those engaged in labor have had as decided 
an influence on prices as any one cause. 

Jfo. 210. In the whole range of dry goods, it appears to us that there is but a very 
slight advance in prices, and this advance, we would say, comes from two causes : In the 
first place, the higher price of cotton is mainly responsible for the advanced prices of goods 
manufactured wholly or in part from this staple. So far as our own experience is con- 
cerned, we notice that in textile goods, such as hosiery, underwear, etc., we are selling a 
constantly increasing amount of cotton goods, and a correspondingly decreasing amount 
of the wool goods. We attribute this fact mainly to the unfavorable manner in which the 
increased tariff on wool affects both the imported and the domestic article. For instance, 
there can no longer be sold a meritorious article in ladies' or men's hosiery, at fifty cents, 
and this is a popular price with large and small retailers. It would, therefore, influence 
the sale very largely in favor of cotton goods. 

The shorter hours of labor, and the higher prices paid lor it, would also be significant 
reasons for any advance in the price of this class of goods. 

Nw. 887. We can only say that the increase in the price of dry goods is due to the 
great increase in the price of cotton and all articles entering into the manufacture of the 
same. 

No. 883. We are fully convinced that it is mainly due to the possibility, under present 
circumstances, for individuals, or combinations of private persons, to accumulate any 
product and commodity, and by so doing create an artificial price on them. The economic 
idea of supply and demand is, by all unnatural means, forced to assume shapes altogether 
foreign to it, and neither the supply nor the demand is now " natural." 

This tampering with and meddling and hindering the natural development of the idea 
of supply and demand creates an unsteady market, and an unsteady market creates the 
possibility of unnatural prices, by persons able to control said market by manipulation 
and exploitation. 

The unions of laljor, now enforcing through them higher wages, cause the manufacturer 
to advance the price on all things, although the effect ought to be that the manufacturer 
should be satisfied with a smaller profit, but this is not to be expected when law covers 
private and special privileges. 

No. 844. The trusts are to blame; also trading stamp companies. 

No. 80. Why do dry goods cost more? Because raw cotton has advanced in price 
from syo cents a pound to over 13 cents a pound. This is an increase of over 100 per 



90 STATISTICS OF LABOR. [Pub. Doc. 

cent. Also, because coal is 30 per cent higher, labor 15 per cent to "20 per cent higher. It 
would be safe to say that every kind of a supply that a manufacturer has to buy is 15 per 
cent to 20 per cent higher. 

No. 888. Trusts. 

No. 877. I think the one reason for the advance in the articles you have named (with 
the exception of boots, shoes, clothing, dry goods, wearing apparel, and rents) is due to the 
advance all along the line in wages. The exceptions I do not consider have advanced and 
are as low as they ever were. 

No. 893. I believe the prices of all articles you ask about have been advanced because 
largely controlled by trusts, and from the course pursued by organized labor. 

No. 838. Our answer in regard to dry goods would be, speculation as the principal 
reason. 

No. 879. One reason for the increase of price in necessaries is the tendency of the 
American working people to live better tlian they can afford on the " hand to mouth " plan, 
and their persistency in buying more luxuries than is consistent with their earnings, and 
their seeming tendenc3' to be " in the swim " with their friends or neighbors who can better 
afford these things. Thus the manufacturer or retailer is able to sustain prices, as the 
demand is undiminished by any economical turn of the average workman. Dry goods are 
necessarily high on account of the high price of raw cotton, as also by the increasing uses 
of cotton, and our export trade. 

The answer to price on coal is this, — trusts. 

The increasing combinations of capital and labor, in my opinion, are more to be feared 
than simple capital and capital, or labor and labor, and I can see no reason why prices on 
necessaries will not be further increased. 

No. 609. In all our e.xperience we never gave better values for the money than at the 
present time. 

No. 830. We believe that one reason for the greatly enhanced prices of the necessaries 
of life is the creation of fictitious values ])y the wholesale watering of the capital of con- 
cerns producing those necessaries. For instance, if a concern has been earning net profits 
equivalent to 25 per cent on its actual cash investment and decides that it wishes to let the 
public share in the prosperity, it issues a prospectus advertising the formation of a cor()o- 
ration capitalized on a basis not only of actual investment, but earning capacity. To pay 
dividends on stock represented by earning capacity, profits must be increased and prices 
must be advanced accordingly. 

On the other hand, labor, realizing that apparently solid wealth is created by this proc- 
ess, demands its share of the increased profits by requiring higher wages for its service. 
Thus the cost of the finished article is again increased, and to maintain the ratio of 
profit requisite to pay dividends on capitalized earning capacity, selling prices must be 
increased. 

No. 608. While the dry goods business has claimed the lion's share of my attention 
for many years, still, as the various branches of business are dependent one upon 
another, it is safe to say that whatever affects the prices in one branch affects the prices 
in all. The causes for the advanced cost on the articles to which yoxx refer are, in my 
opinion, as follows: 

First : The shortening of the daily hours of labor in all departments of business, which 
has been gradually going on for many years. This has necessitated increased help, thus 
increasing expenditures, and as a consequence, prices have advanced. 

Second : The labor question, in one way or another through strikes. When the strike 
has been against manufacturers it has depleted the market of goods, and the supply being 
unequal to the demand, prices have naturally risen. If the strike is for an advance of 
wages, and is successful (as is usually the case), the advanced prices continue indefinitely. 

Third: Speculation. The inordinate desire to get rich, so prevalent nowadays, has 
tempted men not only to enter the stock market, but all, or mostly all, the markets pro- 
ducing the necessaries and comforts of life; forcing up the prices through unlawful com- 
binations and maintaining them by constant manipulation. 

Fourth : The extravagance of our State and municipal administrations. This ex- 
travagance has been yearly on the increase, until it has become, in my opinion, the most 
serious problem now confronting the merchant. 



No. 15] THE CAUSES OF HIGH PRICES. 91 

To meet this extravagance, the assessed valuations of store property have been in- 
creased entirely out of proportion to the increase in the volume of business. This is 
especially true, I think, in the business district of Boston, where the rentals and taxes are 
now so high as to be in many cases a burden. 

In conclusion, permit me to s^ay that the increased cost of goods in the dry goods line 
has not been so great as in other lines of business. This is due perhaps to keener com- 
petition and to the fact that the punihase of these goods is rarely a pressing necessity. 

BTo. 613. First: Higher prices as regards vegetable products are generally brought 
about on account of poor season in crops. The supply being smaller than the demand it 
must of necessity increase the price. 

Second: It should not he lost sight of that speculation in any staples, notably cottons 
this last year, has been a great factor in not only decreasing employment of labor, hut in 
advancing the price on goods to an unreasonable extent. Every manufacturer must take 
measures to protect himself, and while goods rise to an unreasonable price, still it is a mat- 
ter of life aud death with tlie producer of such goods to sell them at prices based on the 
cost of raw material. 

Thii-d : Higher prices, however, are also brought about very largely by the desire of the 
merchants who control the market on these many articles of such vital importance to the 
American people to become rich quickly, and this craving after enormous wealth results 
from time to time in the oppression of thousands and thousands of poor people by forcing 
them to pay the unnecessary advances called lor by them. In other words the trusts are 
in a great measure to blame for many of the high prices prevalent at the present time. 

Fourth: But it would not be just to lay everything entirely to the action of the trusts, 
and poor crops, or even short supplies. The laboring man himself brings about the result 
to a marked degree; especially in the question of higher rents. It the carpenters, brick- 
layers, plumbers, and other laboring men that are employed in the building of houses 
demand more pay, and tlie property owner is obliged to pay the builder for all these in- 
creases, certainly he is going to advance his rents in proportion to the extra amount it has 
cost him to build, and the workingman does not stop to realize that his demands, which 
sometimes are unreasonable, only revert back to him in the end. 

In our opinion, we consider the labor question one of the most important factors in the 
advancement of prices. With the continual agitation, the strikes and the uncertainty exist- 
ing, it works a great influence among the employers of labor, who consequently must take 
every advantage of active business to make all the money they can. They know not at 
what day they will be paying their rent without a possibility of prosecuting their business 
unless they give in to the unreasonable demands made upon them. At the bottom of it all 
is the one important fact, that the maximum wage is demanded for the poor workman. To 
carry out that principle it influences good workmen to dally, and not outstrip the poor 
workman in the results of their labor. This, of course, is done to help him to keep his 
position, and thus the expenses of all business are increased. In the old days when every 
man did his very best, anxious to please his master and do a good honest day's work, it 
contributed to keep down the cost. 

You ask us then, why the prices of provisions, vegetables, dry goods, clothing, rent, etc., 
have risen. The state of things just mentioned has tended to make an advance all along 
the lines. All these staples of life have increased the same as rent must increase when the 
workman insists on working a limited number of hours at the maximum rate of wage. 
Capital can survive at a low rate of interest, but capital will not invest and build houses 
and go into enterprises without an adequate return; consequently the whole labor move- 
ment is responsible for a rise in the necessaries of life. 

No. 216. I believe the causes to be mainly monopoly as thus defined : 
Monopoly: — Control, absolute or substantial, temporary or permanent, of the stip- 
ply and hence of the price of any commodity or service, whether maintained (1) through 
control of natural resources, (2) through some special and exclusive right or privilege 
conferred by law, (3) through combination or concert of action, or (4) by any other means 
which are not available to similar capital and skill in competitive hands. 
To this must be added consideration for the depreciation of gold. 

Electrical Goods and Construction. 

Hfo. 69. The only explanation, it seems to me, is that the increased cost of labor is 
solely responsible for the same. lam rather surprised that the rise has not been much 
more, but I look for the same nevertheless. The increased cost of labor and decrease in 
working-hours will certainly produce a much higher price in all food articles as well as in 



92 STATISTICS OF LABOR. [Pub. Doc. 

clothing and in fuel, itents will rise very materially owing to the excessive cost now 
in putting up buildings and the maintenance thereof. 

The condition of supply and demand will ever assert itself and it is as sure as the law 
of gravitation. 

No. 70. We are convinced that the increased cost of the necessaries of life is due 
almost wholly to the increased cost of labor. In our own experience, manufacturing, it is 
true that the cost of materials has increased, but in seeking the reason for this we find 
that it is also due very largely to the increased cost of labor, so that it seems to us tliat the 
whole question is answered by the one statement, increased cost of labor, which directly or 
indirectly affects every part of production from raw material to the consumer, including 
transportation. 

Fish. 

Jfo. 33. The increased prices of all articles mentioned, with the exception of flsh, are 
caused, in our opinion, principally by the increased cost of labor due to labor unions. The 
increased cost of flsh is due to the scarcity. 

No. 100. The price of flsh depends chiefly on the catch. Prices of .salt mackerel and 
codflsh have been high owing to the fact that the catch of these fish the past few years has 
been light. It is so with all kinds of fish, fresh, salt, and canned. The cost of building a 
fishing vessel is considerably more tlian it was several years ago, owing to the increase in 
the cost of nearly everything that goes into Its construction. A light production of flsh the 
past few years has favored the vessels. The prices of flsh have probably advanced some 
in sympathy with those of other commodities. 

No. 5.54. Labor and capital travel hand in hand; the pulse of each moves simultane- 
ously. AVhen labor ceases to form unions and unions discontinue to dictate hours and 
amount that the laborer shall receive for his toil and disband their organizations, thereby 
doing away with the walking delegates in each branch of labor, and allow the laborer to 
receive the amount of value that his talent will permit him to receive witliout dictation 
from organized bands, tl)en capital will cease to organize combinations which bring busi- 
ness upon a common level. For when one branch of business increases its prices, others 
naturally must follow, which principally is caused by dictation of the price of labor on all 
articles of manufacture or production. As to the matter of flsh you mention, will state 
for a fact that the prices are governed by quantity, siipply and demand, and that our price 
to-day compared with years past will average about the same, and as fish is generally 
considered a cheap line of food, therefore not so much afl"ected as any other articles men- 
tioned, as each individual engaged in Ibis business governs his own price without dicta, 
tion, and competition keeps the prices at a reasonable figure. 

No. 558. We think one of the great causes of high prices on articles of different 
kinds, such as shoes, clothing, dry goods, etc., is the high cost of labor. We are not 
familiar with the conditions in the different lines, any more than in a general way, but 
would say that this is one of the great factors leading up to this condition. 

In our own line, the deep sea fisheries, would say that the cause of tlie high price of salt 
fish last winter was a scarcity of Ijait along our coast last year. This was caused by the 
failure of the catch of squid, which is the greatest bait for codfish our men can get. 

Another great factor and one which is of as much importance as the bail question is the 
dogfish that infest the fishing ground during the summer seasons. Every year they are 
getting more numerous, and it is now so bad that the fishermen on most of the Banks are 
unable to set their trawls, as the dogfish will eat up their trawls as soon as they reach the 
water. In the manufacturing of salt codflsh, would say also that we are paying much 
more for labor than we did a few years ago, which also adds to the cost of same. 

Flour and Cereals, 

No. 565. Supply being inadequate to the demand has raised the price of cereals and 
other farm products. 

Unnatural speculation of capital is to blame for high price of cotton and some other 
commodities. 

The railway trusts and other combinations are Ijlamable for the high price of coal and 
minerals. 

A high tariff on raw materials that should and could to an advantage come fi-ee to the 
States. 



No. 15.] THE CAUSES OF HIGH PRICES. 93 

No. 500. So far as flour Is concerned, the consumption of wheat has recently over- 
taken supply more closely than ever before. The wheat crops of 1902 and 1903 were, and 
that of 1904 bids fair to be, of somewhat smaller volume than the preceding crops. The 
two former crops were likewise of inferior quality, resulting in a greatly reduced quantity 
of the grades deliverable upon speculative contracts, which made control of speculative 
markets unusually easy. 

Accompanying this, there has been a largely increased consumption of bread per capita 
due to its being very much the cheapest of staple food-stuffs and the fact that the more 
rapid rise in price of necessaries than in wages compelled strict table economj' on the part 
of the masses. 

No. 45. In general: Increasing consumption; decreased supply in the same line; 
control by capital ; union labor; higher freight rates. 

No. 567. In my own line I make quite a study of the conditions surrounding it from 
all reliable sources at my command, and while the price of flour for the past two years has 
been higher than for several years prior to that, yet when compared with other food prod- 
ucts it can but be admitted that flour is yet cheap. In my opinion the reason for the higher 
prices that have existed during the past two years on wheat and flour has been governed 
by supply and demand, as during the past Ave years our visible supply at this time of year 
has been gradually decreasing, which is a plain proof that the consumption for the year 
has increased more than the increase of output. Whether the farming community, as an 
organization, has rulings to restrict the output of farm product is a matter 1 am not in 
position to pass an opinion upon. One thing I do know, that a farmer is anxious to raise 
all he can of the commodity that yields him the best profit, and to keep all farm products 
balanced, to meet the demand, it requires a well-diversified product. This, I believe, is 
satisfactorily arranged by the farmers' organization, which would naturally result in a 
uniform ditt'erence of price on the difl'erent farm products according to the supply and 
demand. 

Competition is sharp in most lines of manufactured goods; some are controlled by 
trusts, but those that are can easily be numbered. On commodities that are not in mo- 
nopoly, my experience in business would lead me to the opinion that prices were governed 
by cost of production and placing upon the market, as the margin of profit on diflferent 
lines are none too encouraging to the operators. The question in controversy is one that, 
in my opinion, is grossly abused by enthusiasts interested in politics whose statements are 
often very luisleading. 

No. 569. We know well why the price of flour has increased. It is a very simple mat- 
ter, as the consumption of wheat, owing to increased population, is very rapidly overtaking 
the production, which has had a tendency to affect price on flour about $1 per barrel within 
the past two years. Of course, at the present time the way the crop looks all over the 
world, there is not much indication of a reduction in cost of flour for the next year, but we 
are in hopes the production will overtake the consumption and thus reduce the price 
of the raw material, and necessarily flour. 

No. 573. The price of commodities is based on supply and demand. Our country has 
passed thi'ough seven years of exceptional prosperity, during which time labor has been 
in demand and, consequently, wages have risen to a high figure. Money has been in de- 
mand and interest charges have risen. The buying power of the people during this pros- 
perity has been increased and the demand for boots, shoes, clothing, dry goods has 
increased. Coal, wood, rents have risen for the same reasons. 

So far as the commodity that we are dealing with, flour, relative to the price of wheat, 
it is lower today than it was during the period of depression. In 1896 wheat touched the 
lowest point ever reached in its history. No. 1 Northern wheat was bought on the Minne- 
apolis market at 49 cents. To-day No. 1 Northern is 98% cents, and we figure that the price 
of flour relative to the cost of wheat was one-fifth higher in 1896 than it is to-day. This 
proves our point that, relative to the cost of wheat, fiour is cheaper to-day than at any pre- 
vious time in its history. 

So it is safe to say that the price of fiour has not risen, except as the raw material, wheat, 
has risen. The price of wheat is higher today because of the law of supply and demand. 
Our country has grown, demanding more wheat for home consumption, and during the 
past three j^ears we have seen smaller crops relative to the population than formerly, so 
that wheat is higher. 



94 STATISTICS OF LABOR. [Pub. Doc. 



Fruit and Canned Goods. 

'So. .579. I would not like to give an opinion except on articles in which I am directly 
interested, that is, citrus and deciduous fruits. By citrus fruits we mean oranges, lemons, 
grapefruit, tangerines, mandarins, or any other varieties of fruits that grow on trees which 
retain their foliage the year round. Deciduous fruits are the fruits of trees which shed 
their leaves in the Fall, like apples, pears, cherries, etc. 

As to oranges — prices are not higher than they have been in previous years. On the 
contrary they are much lower, as notwithstanding the duty of one cent per box on all foreign 
citrus fruits, California is and has proved herself able to not only supply but over-supply 
the demand, raising and shipping East the past season over 30,000 cars of oranges and 
lemons; that is, the amount will reach that figure when the season is ended. Of course 
the majority of this amount is oranges, and prices on California oranges have not been 
so low since California began to raise this fruit, the average per box in carlots for the 
greater part of the season not being over $2 per box, when $2.75 to $3 was an ordinary 
average two or three years ago. It is simph' a case of over-production, and the growers 
in California are at present trying to devise some method of combination in shipping that 
will allow them to secure more remunerative prices, as in many instances the prices real- 
ized have been below the cost of production. 

As to deciduous fruits — this season thus far, we have been getting rather high prices 
on account of a short crop of the varieties of fruit which have so far reached this market, 
but the varieties which are yet to come forward are a larger crop and shipments will be 
larger and prices will be lower, so that they will be within reach of nearly every one who 
has money to purchase. Prices on deciduous fruits last year were also high owing to a 
partial or total failure of fruits in many portions of the United States which left California 
in practical control of the market. Such is not the case this season, however, as for in- 
stance, on peaches, Texas, Missouri, Arkansas, Georgia, Delaware, .and New .Jersey all 
have good crops, especially Georgia, which lias the largest crop they have ever raised in 
that State, and prices during the height of tlieir sliipping season will certainly be low and 
consumers should take advantage of their opportunity and buy at this time. In the other 
States mentioned tlie crop is only an average one, but with an average crop from all of 
those States there is no reason why the pubhc should not be plentifully supplied with 
peaches this season at reasonable prices. California has only an average crop, but they 
have to pay high freight rates from that Slate. The fruit has to be refrigerated the entire 
distance and the expense is so heavy that only at certain times will they be Jible to make 
any stK'h heavy shipments aa they have the past four or five years; but they have the fruit 
to ship when the opportunity offers and when they see a chance to get a reasonable price 
over and above freight and refrigeration charges. In all probability, however, the greater 
portion of the crop will be canned or dried and will reach the Eastern market in that state 
later on. California has a very heavy crop of pears this season, probably more than all 
the rest of the States in the United States coinbined, and will amply supply the Eastern 
market with that very fine variety of fruit, the equal of which is not raised anywhere in 
the United States. They also have a heavy crop of grapes, both table varieties and the 
variety known as Muscat, which is used in the making of raisins. In fact, the raisin in- 
dustry is at present overdone and the growers are obliged to combine their shipments in 
order to keep prices above the cost of production. 

Bfo. 337. Higher prices are largely due to shorter hours of labor and higher wages. 
Farmers have difficulty getting help at reasonable prices, we think. We believe' artisans 
get much more pay for less work than ever before, causing increased cost of production. 

Bfo. 578. Prices of fruits are controlled by demand and supply. 

No. .581. We think that a general explanation of such increase in price of the above 
articles is that the cost of labor has materially increased, and that the private firms and 
corporations selling such products to the general public have been compelled to charge 
more for the same on account of the increased cost to such firms and corporations in rais- 
ing, purchasing, and importing (as the case may be) such articles. 

We are, however, pleased to point out a sliining exception to the general rule, i.e., the 
present prices for bananas, which compare very favorably with the prices a few decades 
ago; in other words, bananas to-day are offered to the public at a much lower price, while 
the quality of the fruit has noticeably improved. 

No. 137. We think the principal reason for advance in prices is the combination of 
capital in the form of trusts. 



No. 15.] THE CAUSES OF HIGH PRICES. 95 

These combinations eliminate competition and althougli the trusts are enabled to pro- 
duce cheaper than before they always advance their selling prices. Regarding groceries, 
especially the canned goods and pickles, we can state that the remarkably high price of 
salmon is caused by the Alaska Packers' Association advancing their prices about 40 per 
cent. In consequence of this advance the consumption has largely fallen oft" and there are 
many thousands of cases still held by the Association in spite of their selling at lower prices 
abroad. Regarding canned vegetables there was only about 25 per cent crop for last two 
years and prices naturally advanced. Canned fruits are selling generally at usual prices. 

Ever}' one knows why kerosene oil and coal are so much higher. We did not know that 
rents had advanced although they ought to on account of increased cost of building caused 
by combination of labor on one hand and combination of capital on the other, both working 
against the consumer who is generally a wage earner. We do not think that boots, shoes, 
and clothing are any higher. 

No. 128. While the prices of groceries in many lines have sharply advanced, this is 
not universally so. Take for instance such articles as prunes, raisins, etc., from Cali- 
fornia, prices are extremely low, — lower than they have been for many years. Prices are 
regulated, we believe, more by supply and demand than anything else, although the ques- 
tion of labor has increased the cost of production in all agricultural as well as manufac- 
turing lines. 

Groceries. 

No. 174. We personally are not of the belief that groceries, provisions, meats, etc., 
have increased in price in any material way. There are a few articles, such as flour, which 
have enhanced in value, owing to a decreased supply, but butter, which in dollars is of 
greater importance, is cheaper now than for any period in the past five years. The provi- 
sion market is to-day lower than at any time for the past four years, and while eggs are 
somewhat higher coffees are on the same level, and teas are on a lower basis, on account 
of the removal of the war tax a year ago last January. Generally speaking of miscella- 
neous groceries, we think that prices are on a parity with the average for the last five 
years. 

No. 158. From observation and experience in marketing package groceries, spices, 
extracts, etc., I am led to believe that the great increase in cost of living to the masses of 
our people can be attributed principally to the fact that they are consuming labels and not 
the actual goods. Millions and millions are spent every year in advertising brands or 
labels. The public pay for the goods, also the advertising, which might be called 25 to SSV's 
per cent of price paid. The goods they paj- for they consume; the advertising is absolute 
waste. The public buy the advertised goods rather than bulk goods because they are led 
to think the\' are purer and better; they pay higher prices and receive less quantity. 
I'ackage goods are deceptive in amount they contain, also often as to quality. I believe 
the money spent annually in advertising and pushing necessaries under separate labels 
would feed half our population. 

One trouble with New England is that too much effort is spent in developing the cities 
while the country districts are left to become a wilderness. Development of agricultural 
lands will do more to reduce the cost of living in Massachusetts than any other thing that 
can be done. 

No. 171. Prices in the general line of groceries to-day average lower than any time in 
the past ten years. 

Canned goods very low with a single exception, corn ; dried fruits very low, all the line ; 
beans and peas very reasonable; sugar and flour very reasonable; vinegar and molasses 
very low; rice the lowest in the history of the business; lard very low; cereals about the 
same as in previous years; salt so low that we know of several manufacturers that have 
been forced out of business; spices vary very little; coffees very low; teas were never 
lower. 

There have been a few instances where combinations have raised the prices of certain 
articles much in excess of their true value, but we find when this is done the consumer i-e- 
f uses to take hold. Consequently the sale of such articles is curtailed. We know of several 
lines of goods to-day that are put on the market at less than cost of i)roduction. 

No. 37. We believe that demands of organized labor have more to do with present 
high prices than any other factor in the situation. 



96 STATISTICS OF LABOR. [Pub. Doc. 

Ko. 161. In a general way we should reply that there had been no advance in food 
products excepting where there has been a shortage in crops. Supply and demand make 
prices of merchandise finally in spite of all artificial methods that can be employed. 

Ko. 157. First: The large crops and export demand for our cereals caused general' 
prosperity in the West and reacted on other lines of food products, bringing the general level. 
up from the unhealthy and abnormally low prices of the period from about 1890 to 1S94. 

Second : The increased demand brought about by the above conditions, also the arbi- 
trary increase in cost of production caused by unionism, lessening the amount produced 
and increasing the wages of the workers. Also the increases in prices by the trusts. 

Third : Rents are higher on account of increased cost of building brought about by the 
general prosperity which enabled the trusts in materials and the labor trusts to furnish less 
for increased cost. 

Aleo the increased taxation brought about by the city and State getting less for the 
mone)- expended than formerly, through the theory that the less hours a man works the 
belter oflE the community is, also the theory that higli wages in government positions, as 
compared with general wages for same work and ability in private life, are good policies. 

No. 169, I would give it as my opinion that the high prices of the necessaries of life 
come from combinations of trade, railroads, etc. Rent for residential property is not 
as high as it was ten years ago, notwithstanding the fact that it costs 40 per cent more to 
build houses now than then. 

No. 181. The following articles in our line have advanced : canned vegetables, canned 
fruits, canned salmon. 

These advances (with exception of some articles like corn occasioned by short crop, and 
salmon by short run of fish, and large sales to Japan and Russia) are due to increase in cost 
of labor, price of tin cans, labels, and cases, owing to combination. 

Sugars : On account of advance in raws. 

Molasses: Some grades higher on account of short production, as Porto Rico goods.. 
There is a large crop of Barbadoes and Antigua molasses and prices on these are much 
lower than last year. 

Cereals: Combination and speculation. 

Coffee: Speculation. 

On the other hand: Rice is lower than ever before, grocery grades selling at mill at li/o 
cents per pound to three and S-li for medium and high grades, fully two cents under our 
best grade price of one year ago. 

Teas : Market practically as low on Formosas as it ever was. 

Dried fruits: Much lower than last year owing to large carry-over of crop of 1902, large 
crop of 1903, and prospect of large crop this year. 

No. 118. The excessive cold winter this year caused the price of vegetables, fish, etc., 
to be higher than usual. Thousands of bushels of potatoes were ruined bj' the frost, and 
another cause for a firm market here on potatoes was because cities from other States were 
drawing on Maine through Boston for their supply of potatoes. The reason for the high 
price of fish the last winter ought to be plain to most every one. Our harbor was frozen 
over to a great extent, and fishermen could not put out to sea, and the weather was against 
the drying of the fish. 

Coal is high because the miners, if I understand it correctly, are getting more wages 
than they ever did and a long suffering, patient public (the people) have to pay for all. 
If the government contix)lled the mines, coal I should think would be from one to two 
dollars cheaper. Wood of course is getting scarcer and higher every year; in years gone 
by you could go within a radius of ten or fifteen miles and get all the wood you wanted at 
a very low price, but now of course you have to go very much farther, and when there is a 
freight rate to pay and two haulings, one from the woods to the car and from the car to the 
sheds, providing you do not have a yard near the railroad tracks, and then to the con- 
sumer, it stands to reason it has got to be higher. The average prices of groceries are no 
higher than they ever were. 

I might add also that combinations or trusts have in some lines caused high prices, 
especially where they have complete control. 

I have in mind a certain combination who have control of a certain article which they 
sell at an exorbitant profit. They also make an article of the same kind verj' much inferior 
(in the name of another concern) which is put upon the market to compete with their own 
goods, but being so much inferior, forces the merchant and consumer to fall back xipon the 



No. 15.] THE CAUSES OF HIGH PRICES. 97 

belter article and pay whatever price they see fit to ask. I at one time worked for a trust, 
or rather for a firm that was owned by the trust, to go and sell goods against other in- 
dependent firms at a level price so that they themselves could have all the trade and get 
all the profit, \yheu they succeeded in driving out the independents, up went the price of 
goods. 

No. 159. On many articles of groceries such as flour, meal (Indian and oat), the crops 
in general throughout tlie country last year were poor, thus prices on meats as well as on 
these things have been afl'ected. Organized labor in our opinion is responsible for the high 
prices on many of the things in the lines mentioned. Kents, coal and wood: All these 
commodities have been affected by the demands of labor. 

No. 167. We do not think that the price of groceries as a whole is materially higher 
than has ruled for some years past. Such goods as teas, coffees, rices, etc., are practically 
as low as they were ever known. Molasses and canned goods rule about as usual, with the 
exception of two or three items, such as corn, salmon, and a few others, of which, owing 
to sliort crop and short catch, very much less was packed than usual last year. 

There are some goods manufactured or controlled by trusts or combinations that have 
advanced materially, and some others, especially goods packed in glass, that are unusually 
high on account of combinations and labor troubles, in the manufacture of the same. 
Cereals, of course, vary according to the crops of the various kinds, l)ut taken as a whole 
to-day, prices on groceries are not on a high basis. 

No. 187. The reason why higher prices have been charged in the last two seasons for 
canned vegetables and fish is that the crop of the former and the catch of the latter have 
been very short. 

We think that the higher cost of labor and the shorter hours during which labor is em- 
ployed, have been a marked feature. 

The advance in the cost of wood, used for fuel, is perhaps due to the coal strike in part, 
and the enhanced cost of lumber may be due to the devastations of the forests. 

The labor problem is certainly at the bottom of the higher cost of living. 

Liquors and Beverages. 

No. 631. Would not the greater increase in consumers compared with that of producers 
account for a raise in price? 

Does not a high selfish protective tariff make an artificial basis and prevent the even 
workings of the laws of demand and supply which God intended? 

Machines and Machinery. 

No. 9. I believe that the advance in prices to which you refer has been caused by the 
operations in Wall Street and the successful demand for high wages from the workmen. 

No. 30. To me there seems to be a number of contributing causes, chief of which 
appear to be the following : 

First : A tendency to combination of all manufacturing interests, and the placing of 
the control of the output of such commodities in fewer hands. 

Second: A tendency in many directions to restrict the output of certain commodities, 
thereby stinting the supply and preventing the possibility of an accumulation to depreciate 
values. 

Third : Too much stock jobbing and trading on futtires, especially as applying to food 
supplies. 

Fourth : The combination of the labor elements in various organizations looking to 
better tlieir condition by fewer hours of labor and larger wage, oftentimes to the dis- 
advantage of the greater number of consumers. 

This country has been phenomenally prosperous and at the present day, compared with 
other parts of the world, conducting business successfully and profitably, but our people 
have been so accustomed to spending money freely and buying cheaply that we have 
become to a great degree wasteful, and have created many artificial wants, while many 
fail to practise such economy as their position and financial standing demand. 

The opinion has been advanced b}' some that we should restrict immigration into this 
country, as it would have a tendency to improve our condition. I am clearly of the contrary 
opinion, and believe for the present at least we should open our doors to the free ingress of 
all industrious, honest, and well inclined persons who desire to make this country their 



98 STATISTICS OF LABOR. [Pub. Doc. 

permauent home. Our success as a nation is in a large measure owing to this immigration. 
While our tariff conditions may require adjustiiieut to meet new conditions, I do not 
believe that we want in general a lower tariff or anything looking towards free trade. 
Protection has been the safeguard of this country and must continue to be so. With a 
larger population, with constantly changing conditions, with modern machinery intro- 
duced to simplify and increase facilities for manufacturing, we must necessarily expect 
changed conditions in values, and must adjust ourselves to them, always remembering 
that if a pendulum is swung far out from its centre of gravity, when released, as iiltimately 
it will be, it will swing to nearly the other extreme and must oscillate backwards and 
forwards until it gi-adually adjusts itself to its proper centre again. 

BTo. 68. The reduction of working time from ten to twenty per cent has caused an 
increase per hour for incidental expenses from over eleven to twenty-flve per cent, and a 
corresponding increase in wages. All producers have found it necessary to meet these 
conditions by increasing the price of the product. 

'So, 73. We believe that there are two primary causes, — first, organized capital in the 
form of trusts; second, organized labor with consequent increase of wages and shortening 
of hours, with the helpless consumer paying the cost of both. 

Bfo. 83. The prices of the necessaries of life are increased on account of the increased 
prosperity of the people of the country. In other words, when the people have money in 
abundance to purchase articles with, the price is always inci-eased, the producers taking 
advantage of the existing conditions. 

The cost of farm products is increased owing to the greater wages demanded and re- 
ceived by farm help and the higher prices charged for all kinds of tools and supplies. 

The increased ability on the part of the people to pay is the main factor which operates 
in the increase of labor or any other commodity. 

Sfo. 7. Due to the general advance along the line of all commodities. That is to say, a 
person dealing in one commodity must exact higher prices for same, inasmucli as he him- 
self is compelled to buy at a higher price than formerly. Whether the present depression 
in trade (which will doubtless continue until after the first of the coming year) will have 
the effect of lowering prices can only be determined by actual test. 

Present indications, however, from the writer's standpoint, do not seem to indicate that 
there is any tendency, even in spite of business depressions, of the cost of living being in 
any way reduced. 

No. 33. I believe that the labor unions are largely responsible for the advance of prices 
on articles which vou have mentioned. 



Meats and Provisions. 

No. 113. The only commodities we handle that we could answer you on are butter, 
cheese, and eggs. As to butter, the prices for the last month have ruled from three to four 
cents a pound less in a wholesale way, considered with the same period of a year ago. 
Although the make of butter for some time past is not quite so heavy, the outlook is for a 
considerable increase in the make over a j'ear ago. Everything at present is favorable for 
a large make throughout this section of the country, but last year the make was cut short 
to a certain extent. We do not expect to see prices on butter average as high as last year. 

On eggs the average price, since the heavy fiow commenced the middle of March, has 
been much higher than a year ago, until now it is half a cent a dozen above the outside 
price a year ago, although the receipts are running very much heavier. This is due largely 
to the light receipts in April and the early part of May that prevented cold storage people 
from getting a full supply, and ihey are now trying to replenish the shortage. We expect 
to see eggs from this on, quality considered, at about last year's prices for the next three 
months. 

On cheese the market is very much lower; in fact, prices are lower now than they have 
been for several years, and all of the stock carried over from last year's stock loses the 
dealers considerable money, and the outlook is for lower prices the season through. 

Ko. 335. We can answer for butter, eggs, poultry, and cheese only. 

Your statement is too sweeping; all necessaries of life are not higher than in previous 
years. In the case of butter and cheese, the market is lower (and has been for some time) 
than for years. Instance— finest creamery butter selling to-day at 18y2 cents and best York 



No. 15.] THE CAUSES OF HIGH PRICES. 99 

state full cream cheese 8V2 cents as against prices of Ave preceding years — 20 to';23 cents on 
butter and nine to 12 cents on cheese ^prices in both cases are on wholesale lots). 

On eggs and poultry your statement is true and the higher values began with the high 
prices of meats In 1902, at which time prices on eggs were averaging four cents per dozen 
under present market. Eggs, therefore, being cheap, and meats high, the demand for eggs 
increased by leaps and Ijounds, the result being that the market showed a hardening ten- 
dency and gradually increased values. 

This higher egg market had the natural effect of inducing farmers to hold their poultry 
for the egg production and this shortened the poultry supply, advancing the average cost. 

No arbitrary advance therefore in the lines in which we are operating has been made, 
and as far as these lines are concerned, a simple answer to your question would be that 
" demand and supply regulate the price." 

No. 317. Supply and demand govern prices. While there has been no actual shortage 
in farm products, the demand has been sufficient to absorb about everything raised, en- 
abling the farmer to get good prices for his crops. He in tui-n can dress and live better, 
thus enabling the manufacturer to get good prices for what he makes as well as to give 
employment to others. This gives the employee a purchasing power, thus creating a 
demand for other lines of goods, and so it goes. 

Notwithstanding all this, the margin of profit in most lines of mercantile business is 
very small. 

Bfo. 363. So far as we can see there is no sufficient reason why provisions — beef, 
lamb, and poultry — should be as high as at present. The large shippers shorten the 
market at their pleasure. Our business is three-quarters poultry, which is too high. There 
are more fowl raised at present than ever before and more eggs being received than ever. 
Of course, our country is growing, but the demand does not warrant the prices which have 
ruled for sevei-al years. 

BTo. 106. We are unable to answer your questions in I'egard to the increase of prices 
in everything except the meats. 

Our belief for the higher prices of meats is for the reason that the Western farmers, in- 
stead of buying cattle to feed with their corn that they have raised, are sending their cattle 
to market half fatted and selling what corn they have on account of the good prices that it 
has been worth. 

In this way they know just what they are doing; whereas, on the other hand, if they 
buy feeders and feed their corn to them, they do not know what they are going to be worth 
when they are ready for market. The chances are that this country is going to have a 
large corn crop this year and that always means we are going to have cheaper cattle, not 
right away, but in the near future. 

Just now cattle are very high, as they almost always are at this time of the year, but 
very soon there will be what is called grass cattle, and, although they are not nearly so 
good, they are much cheaper. 

Ko. 105. The prime cause for the increased cost of meat over that of a few years ago 
is in the advanced cost or selling value of grain and the limitation of free pasture lands 
from year to year by the National Government. 

Such land being taken up by settlers, naturally decreases the resources of feeding and 
growing great herds of cattle cheaply by the great cattle companies, as has formerly been 
done. 

Another great factor in the cost of meat is the extremely low price of tallow as com- 
pared with prices it brought when beef was much lower than at the present time. 

Hides have brought good prices for the past few years and this naturally makes the 
leather cost more than when hides sold very low, as in 1S93 and 1894. 

The advanced cost of labor in all branches of industry adds very materially to the cost 
of the article produced. 

The writer of the above inclosed in his letter an interesting 
newspaper clipping in relation to grazing land in Nebraska, 
which is here reproduced for its historical value : 

"A Nebraska cattle ranch, one mile square, absolutely fi'ee," is the oflfer which the 
government is preparing to make to every man or head of a family in the United States. 



100 STATISTICS OF LABOR. [Pub. Doc. 

As there are 8,814,757 of these acres from which a selection may be made, any one desiring 
to become the possessor of 640 acres of fine grazing land will have no trouble flDding a 
tract which is suited to his taste. 

This land has just been opened in these large tracts by the Kinkaid bill, which passed 
Congress and was signed by the President of the United States on the last day of the 
recent session, and the law becomes operative on June 26, 1904. On and after that date 
these 8,844,757 acres, most of which comprise as fine grazing land as there is in the world, 
will be open to the public as homesteads. As an example of the quality of some of this 
land there are in Rock County 220,302 acres of public lands, and yet at one railroad station 
in that county there is more hay shipped to market than at any other railroad point in the 
whole world. 

The lands affected by the Kinkaid bill have been open for homesteading in lots of 160 
acres each, for many years, but, not being suitable for agricultural purposes, and 120 acres 
not being large enough on which to raise cattle, the lands have never been taken up by 
homesteaders. However, a square mile of this land will furnish pasturage and feed for 
100 head of cattle throughout the entire year. 

Great tracts of this laud have been fenced by the cattle barons of Nebraska, and it was 
to have these illegally constructed fences removed that the government last year sent 
Colonel Mosliy, the former Confederate cavalry leader, into the State to enforce the law- 
regarding these fences. It is said that one ranch, with headquarters at Ellsworth, Neb., 
had under such fencing nearly 2,000,000 acres of government land. There wei-e dozens of 
other great ranches which included hundreds of thousands of government land within 
their fences. 

The Kinkaid bill probably sounds the death knell of the cattle barons, whose herds of 
thousands roamed over the ranges, more effectually than any fence removal order which 
the President might promulgate. With settlers from all parts of the United States flocking 
in and taking homesteads of 640 acres each, the public domain in this State is a thing of 
only a few months more, and then, without the necessary lands upon which to graze their 
herds, the cattle barons must go out of business. 

This is the last large distribution of good land which the United States Government will 
ever make. It has long been recognized that the great plains of Nebraska constituted the 
best body of public lands extant, and with the transfer into private hands passes the last 
chance of the poor to get free homes in anything like large numbers. 

It is only the poor man who can homestead this land — that is, any man owning more 
than 160 acres of any kind of land anywhere is barred from participating in the Nebraska 
land distribution. According to the provisions of the law any person who is the head of a 
family and who is a citizen of the United States may take up a homestead, provided he is 
not already the owner of more than 160 acres of land. 

Single women who wish to take a homestead must be of age. Any young man more 
than twenty-one years may be a "homesteader." The law requires each person to 
make oath that he has personally examined the land for which he applies. 

There ia one man in Omaha who has three unmarried daughters and two sons, all more 
than twenty-one years old. He is arranging to take his family, which numbers six, to the 
public lands and have each member so entitled to a homestead of 640 acres. The family 
will thus own 3,840 acres of land in a compact body. 

This makes a first-class cattle ranch and will cost him absolutely nothing, for the gov- 
ernment makes no charge whatever for the land, provided the homesteader lives upon it 
for five years. 

No. 886. The first and great reason I think may be found in the fact that none are 
content with the same things that satisfied our fathers and mothers. We demand larger 
and better liouses, with modern conveniences, better clothes, better boots and shoes, for 
old and young. Again, I think a very much smaller proportion of the people produce the 
things they consume. The great combinations, also, have had much to do with the increase 
in prices. 

JTo. 340. I don't think there is any cause for goods to advance; I think the trusts are 
doing it. 

Bfo. 86. The principal cause is one of supply and demand. Naturally a man selling 
anything tries to get all he can for it, and if he sees that the supply is less than the demand, 
he naturally puts his price up. Another point is that on account of the good times that 
have been in this country of late years, people have had more money to spend and, con- 
sequently, have not figured very closely as to the cost of the material, with the result that 



No. 15.] THE CAUSES OF HIGH PRICES. 101 

prices have been put up on them in proportion to tlie money which they have made. Now, 
however, times not being so good people are looliing to get all they can out of their dollar, 
and are making comparisons to what is, and what has been, with the result that complaints 
are being made about present prices. 

I thinli that if you will go back you will find tliat in several lines of food products, the 
prices are no higher to-day than they were a number of years ago, but you must remember 
that we have had, of course, lower prices than we have to-day, but at the same time we 
have had higher, and while food products may be higher, I was not aware that boots and 
shoes were any higher than for the last ten years. 

We are passing through an era at present of hard times, which natui-ally makes one 
consider these questions more than when everything is going smoothly, and things are 
prosperous and you have plenty of money to spend. 

No. 352. In the first place, rents are not higher; they are lower, aud in property that I 
rent, with seldom a vacancy, I have now three suites empty. 

Horses are high, because the price a few years ago was so low that most every one 
stopped raising them. In a few years, you will see low prices. It takes four or five years 
to get a horse I'eady for the market. You cannot change the supply of anything in one or 
two years. 

Poultry is high because the high price of grains and the low price of poultry drove a 
great many men out of business. Another thing, we are shipping aud eating more than we 
used to on account of the increased population. The supply has not kept pace with the 
demand. 

Beef and lamb, also pork, the same way. Do you not think \vith the high prices that are 
being paid at all our stockyards for cattle, hogs, and lambs, there would be a lot come in if 
they were in the country? 

We must have a low price on corn, and a number of years to raise enough to meet the 
increased demand for all these things. 

There is no doubt that combinations in the mining of coal have caused that to be higher, 
and we could say the same to some extent on some of the other things. 

We must have laws that will protect the independent dealer, and not let the combinations 
drive him out of business. They can sell goods at a number of places at a big loss, aud 
make it up in other places. I have a large cattle ranch, and have had a good chance to get 
posted on tliese things. 

Xo. 383. We feel that we can express an opinion so far as it concerns our own busi- 
ness; that is, provisions and meats. Of course we would expect some increase in prices of 
same in the last few years on account of the increase of salaries ; but that in itself is a small 
item in our business. The packing houses of the West, and in fact all parts of the country, 
are virtually under one head to-day, and it is a part of their plan to keep up prices as high 
as possible. It is customary now, and has been for some time, for the branch house to tele- 
graph to Chicago at least twice a day what they have sold and what price the goods have 
brought, and if the prices are not high enough it allows the packing houses to change them 
and supply any particular city that will allow the price to go higher. In years back, when 
there was a number of large packing houses through the West, having no connection one 
with another and all being anxious to do business, it made a competition in our line which 
the consolidation of all these packing houses in practically one body, as they are to-day, 
has done away with; and I reallj^ can offer no better reason for prices being higher than 
they were in former years than that same lack of healthy competition. It would appear to 
an outsider that Armoiu-, the Swift Co., Cudahay, Nelson Morris, Hammond Packing Co., 
and a number of other concerns were competitors, but it is not so. AVhile they do their 
business separately and go under different names yet the National Packing Co. is repre- 
sented by them all, and they are all represented by the National Packing Co. In closing 
we can only say again that we consider it a lack of competition which is the cause of high 
prices, in our particular line. 

Pfo. 367. We believe that we ai-e entitled to speak with some authority on the situa- 
tion as regards the principal pi'oducts which we handle, viz. : Fresh meats. 

We do not consider that the price of fresh beef has been high, in the sense of extortionate, 
during the past Winter, when you take into consideration the heavy expense incurred in 
getting beef up to a point where it satisfied the requirements of the consumer on this mar- 
ket. For the past two or three weeks the price has been advancing solely through natural 
causes and iu accordance with the law of supply and demand. Throughout the West the 
supply of cattle in satisfactory condition for market is smaller than has been known for 



102 STATISTICS OF LABOR. [Pub. Doc. 

some time. Not that the general supply of beef is light or prospectively light, but the 
public tasre is becoming educated, and each year brings a demand for a better grade of 
beef. At this season of the year, several weeks before the grass or range cattle are fit for 
market, the supply of fed cattle, heavily depleted by withdrawals for export, naturally 
shortens up, and like every other commodity, as the supply decreases, the prices advance. 

For several weeks past there has been very little, if any, margin on the right side for 
the shipper, and were it not for the enormous volume of business done by the Western 
packing houses, wlio are furnishing beef and provisions for our market, shipments could 
not be made on a profitable basis. 

The Southern or Texas cattle, of which no doubt there is a good supply, are not yet in 
fit condition to be marketed, and as this statement will apply to all cattle, except those 
being fed at the feeding stations, it will be some weeks before the price of beef will be any 
lower. 

Sheep and lambs have been unusually high all winter and up to the present time, simply 
on account of their extreme cost alive in the West. Nearly all sales have been made at a 
loss. It is only because of anticipation of lower cost with a fair market in the future, and 
the necessity of keeping in the business in order to hold trade, that the shippers are willing 
to continue shipments. As it is the arrivals of sheep and lambs are, and have been for 
some weeks, extremely light, simplj- on account of the high cost of production and the low 
prices to be obtained in proportion to the cost. In due time lower prices for fresh meats 
and meat products will prevail, but this result will be brought about through natural 
causes. 

Bfo. 371. The main cause is the increased cost of labor and consequently the increased 
cost of production, which applies to almost every requirement of life. 

Jio. 108. The large increase in price of labor in all branches of business, especially 
where labor enters largely into the cost of manufactured products and in buildings, both 
for residential and business purposes; not only have M'ages advanced but the hours of 
labor are restricted, both of which tend to advance the cost (materially) of many neces- 
saries of living. 

Rents to the business man have increased very much in the past few years and taxes on 
propert}^ have been much higher owing to increased valuation by assessors of taxes which 
usually have been borne by the tenants of mercantile buildings. It all comes out of the 
pocket of the consumer. 

Bfo. 316. 1. Merchants naturally want to do all the business possible and are willing 
to take some risks. They see they made some profit on the previous year's basis of values 
and to increase their business are willing to take a little greater chance this year. 

2. They see prices higher in other lines and think that they should share in the improve- 
ment. 

3. They think prosperous times will enable consumers to stand a little advance in 
prices. Actuated by these beliefs dealers are willing to speculate. They compete for the 
surplus during the period of greatest production and put it in storage. The price at which 
dealers are willing to store makes the price for the balance of the crop. Thus a little is 
added to prices through a cycle of years until there comes one or two years of bad business 
when the surplus must be sold at a loss. This may be due to the fact of an unusually large 
production, or the fact that prices have risen above a basis at which the commodity can be 
exported. Dealers lose courage. They are unwilling to pay so much the next year for 
the surplus and prices gradually work down until confidence is restored. 

Ko. 300. 1. Trusts. 

2. Tariff. 

3. Inflation of the currency. 

Bfo. 311. In our line, which is butter, cheese, eggs, beans, and peas, we have always 
considered the demand and supply made the price. We believe this would follow in the 
other lines that j'ou mention. Excessive crops in anything mean a low price to the pro- 
ducer. 

No. 334. To-day's prices of butter, cheese, eggs, and beans are lower than they were 
in June, 1903, or 1902-1901. The price of butter and cheese is governed largely by the 
supply, and export demand. Of course in the case of coal and oil the price is made by the 
railroads and coal companies and the Standard Oil Co. 

'So. 200. Trusts and labor organizations. 



No. 15.] THE CAUSES OF HIGH PRICES. 103 

No. 296. We consider that three elements enter into the making of prices on tlie 
various goods, viz.: Competition, supply, and demand. 

In our line of business, which is the produce commission, parties througliouttlie country 
send us different goods and pay us a certain per cent for selling them. There are no prices 
made on the goods to us, but we sell them the best we can on the market and are governed 
in making our prices by the supply and demand. For instance, if we should receive some 
poultry and ask 14 cents per pound for it, and parties who are buying would not pay that 
amount and bought of other parties, we should have to sell it at 13 to I8V2 cents to make 
the sale. The buyer and seller have to agree on some price and that constitutes the market 
price. The party shipping the goods to us is the one that pays us to get all we can for the 
goods, and the buyer is on the market to buy the goods at the lowest figure he can. A 
short supply of goods induces high prices and when there is a large supply the goods have 
to be sold for less. No better illustration can be had of this than when the demand was 
exceedingly large for coal, dealers could sell at from $1.5 to $18, and when there is plenty 
of coal it can be bought at $6 to $7 per ton. That shows how the market operates when 
there is a short or an over supply of goods. 

We do not usually see so much advance in pi'ovisions and meats as the example of coal 
cited, for when prices get too extreme on one kind of meat the public will use some other 
kind which can be bought for less; leaving the demand so light for the high-priced kind 
th;it the receipts will be ample to supply the trade. 

jSo. 332. Combinations of capital and labor have caused high prices of a good many 
articles. Two years of poor crops have affected the price of potatoes and gai-den truck. 
Probably high prices in general could not have been maintained were not woi'kingmeu 
getting better wages than a few years ago. 

Metals and Metallic Goods. 

Ko. 8. The original cause of the inci'eased cost was that business was so brisk that 
people in all lines of trade found it difficult to keep pace with their orders and at such a 
time the natural tendency is for people in trade to be a little stiffer in price and get a little 
more, as thej' can do, for quick shipment of goods. Immediately following this, however, 
came the demand from labor unions for increased wages, and the demands for increased 
wages were in excess of the increased cost of goods, that is, the percentage of increase 
demanded was a great deal larger than the percentage in the increase of the cost. This 
started a second increase in the cost of goods to keep pace with the extra cost of labor, and 
since that time it has been a constant see-saw, first, increased cost of living, then increased 
cost of wages beyond the percentage of increase, and so far as can be seen with no advan- 
tage whatever to the workingman. 

'So. 74. We attribute the rise in pi-ices to the trusts. 

No. 13. I believe the protective tarifl" is the cause of the existing conditions to which 
you refer. 

Xo. 36. In my opinion the prices of the articles mentioned have risen for three reasons 
in general, and several more in particular. The three general reasons are : — 

Fi7-st : The increase in the supply of gold. If the standard of value was beaver skins, 
and the supply of them should be largely increased, each beaver skin would exchange for 
less of other articles, and in like manner iS^io grains of gold will now exchange for less of 
other articles. In other words, the price of other articles has increased. 

Second : The tariff was intended to increase the price of almost everything, otherwise 
there was no motive in passing it. 

Third : Combinations of capital and labor. 

These are all formed for tlie avowed intention of increasing the price of labor, and the 
profit to capital. 

The particular reasons which apply to each article are as follows : 

Flour: Rather short crop of wheat and speculation. 

Meat and related products : The big packers killed out the local butchers aided by lower 
railroad freights than paid by small shippers. Owing to loss of local market the farmers 
were forced out of raising beef, cattle, and sheep. They turned to dairy breeds, not fit for 
beef, and are now out of beef producing breeds. 

Clothing: Tariff and combination. 

Potatoes : Poor crop last year. 

Cotton goods : Same reason and boll weevil. 



104 STATISTICS OF LABOR. [Pub. Doc. 

Coal: Combinations, wholesale and retail. 
Iron and steel : Combination and increase in cost of labor. 
Biiilding material : Wood and timber — loss of forests. 
Builders' hardware : Same as iron and steel. 

Rents : Higher taxes, increased cost of labor, strikes. Poor returns on rented property 
before the rise. 

Boots and shoes : Tariff and higher labor cost. 

Paper. 

'So. 25. 1. Increased production of gold. Tliis means higher prices for goods, or 
what is the same thing, lower purchasing power of gold. 

2. Abundant crops. Very large crops of wheat, coincident with a scarcity abroad, 
brought large sums of money into this country from Europe. 

3. Increased demands. The country being richer by these sums, the demand for goods 
became strong. Farmers paid off debts and bought new machinery, wore more and better 
clothes, used more furniture, etc. This increasing demand stiffened prices on all lines of 
goods. Manufacturers bought more inacliinery, enlarged their capacity, built new plants, 
making demand for building materials, iron, steel, timber, and for labor. 

4. Labor. Labor in all lines became scarce. Prices for same advanced, and this in time 
increased demand for goods. Labor unions restrict production by shortening hours of 
labor. Strikes restrict output and hold up prices. 

5. Transportation. For above reasons railroads increase wages, and add same to 
freight charges, and this to cost of all goods. Consolidation of transportation companies 
enables them to maintain exorbitant rates. Consumers have no remedy. Coal in par- 
ticular is higher by this fact and by the further fact of increased labor cost in mining it. 

6. Wood: An ever increasing scarcity. We use more than we grow. 

7. Clothing: High labor cost, and high priced cotton. 

8. Rents : High cost of labor, iron, hardware, lumber to build with, and to make rejjairs. 
Increasing demands for better roads, schools, sidewalks, sewers, police, lighting, etc., 
make higher taxes and consequently higher rents. 

Rents and Ileal Estate. 

No. 1. I built a house last Fall costing $7,'200, and looking into this matter closely I 
believe the same builders could have put up the same house, six years ago, for some $1,400 
less money. The large advance was, of course, on the lumber, and I believe is owing to 
tlie natural law of supply and demand. Everything else about the house I have found to 
be advanced by "combinations," even the nails and wires. I believe the combination 
causing the largest advance is tlie combination of labor. Six years ago many trades 
worked 10 hours per day; on my house, last Fall, they worked only eight hours. On most 
of the manufactured things in it (plumbing and hardware) combinations of capita! took 
out several " plums " as well as combinations of labor (trade unions) . On the whole I lay 
the major portion of advance to lumber and combinations of labor. 

With the exception of meats I lay the advance of our food to the law of supply and 
demand and believe it is natural. 

I am suspicious that our meats are advanced, say five to 10 per cent, by combination of 
capital. Other foods may, and undoubtedly are, advanced, at times, by speculation ; how- 
ever, I regard such advances as only for a short period, and not permanent, and are usually 
followed by a period of decline. 

In manixfactured products I believe competition iisually favors the buyer, notwithstand- 
ing all the combination of capital and labor that we undoubtedly have. There are many 
exceptions to this; notably coal at the moment. All our raw materials are subject to 
speculation, but I never could see that this advanced the product permanently. 

I believe the combination of labor takes more out of my pocket to-day than the com- 
bination of capital. 

Sfo. 639. First, as caused by the acceleration in general vahie owing to the combination 
of business interests throughout the country forming practical monopolies and controlling 
certain market necessities, raising the price thereon and incidentally drawing other 
prices upward as well. 

This, of course, has a secondary considei'ation in the face of the general agitation in the 
wage market and, in our opinion, the demands of wage earners have tended to encourage 
the advance in all standard market requirements. 



No. 15.] THE CAUSES OF HIGH PRICES. 105 

This is incidental not onl}- to the Increased cost arising from such advances in wages, 
l)ut also to the inclination on the part of the manufacturer to take advantage of this in his 
own behalf to the fullest extent and push prices to the utmost limit. 

5fo. 655. In my opinion the high prices of the necessaries of life are due entirely to 
the trusts, both capital and labor. This can he easily seen by considering the result of the 
late coal strike. Capital and labor are both gainers by same, wliile the public have to pay 
the advanced price. The meat strike will result in the same way. 

The great middle class that are dependent on a fixed salary, or have a fixed income 
derived from mortgage investments, are being squeezed as the result of labor unions and 
capital trusts. Salaries have not been increased but interest on mortgages has been re- 
duced, and the cost of living has been advanced at least one-third during the past 10 years. 

Jfo. 652. The increased pay for a shorter day's work will account for a large part of 
the advance in price, although there may be other reasons. 

We believe the advance in coal is due to a pool or combination which fixes the price 
regardless of the law of supply and demand. 

The advance in wood is due in this section to the scarcity of that commodity and the 
necessity of longer freight hauls, and here incidentally comes in the price of labor. 

As to rents, with the great advance of all materials and labor which goes into the con- 
struction of a building, it would be natural to look for increased rents if the law of supply 
and demand would wari'ant it, but such is not the case in the local market. 

In our vicinity we can certainly say that it is a very exceptional case where rents have 
been increased and due to some special condition. 

Rents are, we believe, lower than they were five years ago, and materially less than they 
were 10 years ago in a very large proportion of cases, and due largely to over production, 
which condition is gradually being overcome. 

If any class of tenants are paying higher rents than they did formerly, it is due to the 
fact that they demand more in the way of modern conveniences and are getting more, live 
better, and must pay for it. Certainly the old, unimproved property which a few years 
ago paid the biggest returns is to-day the hardest of all to rent, and after taking out the 
expense there is little left. 

Increased wages among mechanics and laborers have enabled them to live in better 
shape, for which they may and probably do pay more, but to the owner, the property does 
not show an increased income. 

No. 649. The only condition referred to in your letter upon which I am at all compe- 
tent to render an opinion is the matter of rents prevailing in my town, which are not show- 
ing a tendency to increase; in fact, in some portions of the town they have decreased quite 
appreciably, say 20 per cent, within the last five years. 

Bfo. 643. My opinion is that the cause of the advance in prices of articles of food, 
wearing apparel, coal and wood, etc., is primarily the result of the late general prosperity 
in the country, partly through continued good crops and mining developments, and some" 
what through the effect of the acquisition of foreign territory, which at least temporarily, 
I think, increases the activities of trade. These primary conditions have made it practi- 
cable to form all of the larger trusts and corpoi'ations involving combinations and large 
capitalization. The result following this has been a demand among the working classes 
for increased wages, which has been met (and is being met), and has given a larger pur- 
chasing power to people at large, which has enabled the various companies, trusts, and 
combinations to increase prices in general, they being followed by those having control of 
the principal staples, such as wheat, meat, etc. 

Xo. 6S0. Too many trying to get a living without contributing or producing. Too 
man}' middlemen between the producer and consumer. Too many living beyond their 
means. Farmers will not work as they did formerly, say fifty or twenty -five years ago — 
a very different class of help, with limit in hours. 

Wood and lumber are getting scarce in New England and never will be much lower. 

5fo. 638. I would say that the reasons why prices of groceries, meats, fish, vegetables, 
etc., have increased, are, in my judgment, due largely to the organizations of both labor and 
capital. Capital — by making a monopoly of the various articles in question, thereby 
destroying healthy competition. Labor — by its unions, making a monopoly of its own 
special commodity, "Labor" — which has the same result in that branch, in destroying 
competition. 



106 STATISTICS OF LABOR. [Pub. Doc. 

In regard to rents being higher, this is not the case, with the exception of certain dis- 
tricts in the heart of the business centre. Large tracts of residential property, formerly 
renting at good rentals, are now very much reduced in rent, notably in the South and West 
Ends. The so-called fashionable district in the Back Bay has practically held its own in 
rentals. The reason for this depreciation in rents is easily found. The average person is 
obliged to pay such high prices for the necessities of life that he cannot afford to pay the 
rents formerly obtained, and real estate owners must either have their property vacant, or 
accept a reduced rental. This reduced rental, coupled with the fact that, in many instances, 
the taxes on the real estate in question have not been reduced, has resulted in a diminution 
in income, derived from said real estate, and a consequent depreciation in value. 

STo. 642. Labor. 

Bfo. 657. With very few exceptions ray experience in the past few years is that the 
properties in my cliarge have been gradually renting for lower prices; this fact is due 
partly to the circumstances surrounding the property, partly to the change in the character 
and class of tenants, and lastly because of competition in the way of new buildings at the 
same or lower rents, or the greater conveniences for the same money as the older buildings 
rented for. The above statement applies principally to the tenement houses and small 
dwellings in the Southern parts of the city. 

In the business and wholesale sections I have noticed somewhat of an increase in rents 
for the store floors, with a stationary scale of rents, or a possible slightly decreasing scale 
of rents for the upper portions of mercantile buildings. I ascribe this condition to the 
fact, at least in the wholesale district, that the principal parts of the buildings are not used 
so much now for business or storage purposes as they were. Many wliolesale firms prefer 
to store their goods in warehouses at low storage rates, keeping an otHce with perhaps a 
Btoi'e or sample room in the business centre. 

The rental values of stores in the wholesale district, per contra, have increased because 
of the increased demand from the wholesalers, who have to a greater or less extent changed 
their business methods as above stated. 

In the retail districts I think that the rents have increased only in a certain limited sec- 
tion, and the increase has been the result of the operation of the law of supply and demand, 
coupled with the idea that in order to do retail business a location in a given limited area 
must be obtained. Outside of the limited desirable area, I think that retail store rents 
have, to a greater or less extent, been decreased. 

If rents, as a whole, have increased throughout the city, my opinion would be that it is 
again the result of the operation of the law of supply and demand. Building operations 
for the last few years have been very much decreased from what they were in prior years, 
and the demand for rentable space has probably increased through the increase in popu- 
lation, with the result that people have peiiiaps had to pay more money to get what they 
wanted, there not being the great many new buildings that there have been in the past. As 
I stated before, however, my experience is that rents as a whole have decreased outside of 
the limited wholesale and retail business districts. 

Sfo. 639. I attribute the high prices to the fact that the great commercial fad is to 
incorporate business concerns. To incorporate costs a tribute to the promoter, who is 
practically a drone on the industry. The owner of the plant incorporated places a too great 
value on the same. In order to seU the stock and render the same good dividend paying 
investments, the first few dividends must be good ones. To do this, a rigid economy is 
exercised in the management of the concern, and a general and gradual increase in the cost 
of the products of the industry affected. As constant dropping wears the stone so does the 
constant lifting increase the price until the profits become unreasonable and they then fall 
to a price which is controlled b}- the supply and demand rather than by the manipulations 
of schemers. The investing public awakes, the original incorporators and allies get the 
cream and sell out, and confiding investors own skim milk, etc. 

Bfo. 144. The cause of high prices of everything in general is " labor troubles." The 
cost of building has increased in the last four or five years nearly 30 per cent, which comes in 
the shortening of hours and high prices of labor. Even the great coal strike was the cause 
of the higli price of coal. I am satisfied in my own mind if there was not a labor organiza- 
tion existing in this country, that prices would be a great deal lower than they are at the 
present time and that we would all have more business than we could possibly attend to. 

Bfo. 146. First: A general time of prosperity caused partly by large crops in the West 
and a demand for all of our surplus abroad, bringing many millions of money in return. 



No. 15.] THE CAUSES OF HIGH PRICES. 107 

Second: The trusts, which began to force prices above where they should be. For 
instance, it is well known that for years meats constantly rose in price in the East, while 
the price of cattle fell oflf in the West; also, see coal price, etc. Now when the price of 
living began to rise, men were forced to ask for an increase in pa^-, which increase they 
got, because men with capital were making money. As their pay increased, so the cost of 
productions increased ; this caused a still further increase in the cost of living. There will 
be a point reached before long when a reaction will set in, but I do not think prices will 
ever go down to where they w'ere, liecause men demand things as necessaries now that 
some years ago were counted luxuries. 

'So. 664. The rents of tenement houses have not increased at all during the last ten 
years, although the cost of building has advanced very materially. This increased cost of 
the building, together with the higher prices charged for land, augments the investment so 
that the owner of the property gets not more than average of four per cent a year upon his 
property, where formerly he received 10 or 12. The electric cars of recent years make the 
facilities for reaching the outlying districts of Boston so good that persons renting the class 
of property described move farther out from the centre of the city rather than pay higher 
rates. To illustrate the increased cost of building, let me go into details, then, it may be, 
you can secure a more tliorough understanding of the matter. 

I will consider the cost of building a three-flat house, of wood, with steam heat and other 
modern improvements in 1894, as compared with 1904, within the limits of the City of Boston. 
We will figure on a single building, of three flats, with two entrances from the street and a 
flat roof, containing four rooms (and sometimes five) on the first floor and five on each of 
the upper floors, furnished on each floor with hot and cold water; bath tubs, water closet, 
and wash-bowl in bath room, set tubs in sink in kitchen, regulation plumbing, including 
tanks, all living rooms papered, and doors and windows supplied with screens. Such a 
house would cost from $4,500 to $5,000 to build at the present time. 

It is not customary among builders, however, to heat this class of houses, except in the 
kitchen, where the water back is required, the tenants generally using stoves in the other 
rooms at their own expense. But if steam or hot water apparatus is installed, $750 should 
be added to the cost, or if furnaces are su])plied, an increase of $.500 should be made. 

A double house, with three flats on each side, corresponding with the above description, 
would cost about twice as much above the ground, the brick wall between the two sides, 
which is now required bylaw, costing practically the same to build as the two wooden 
sides saved in constructing this class of houses. 

As the law requires only three feet of space on each side of double houses, it is frequently 
practicable to divide up the land so as to save something upon the cost of the latter in recon- 
struction of this class of buildings, and rents generally run $1 a month under those charged 
for the class previously mentioned. 

A large proportion of such buildings are erected in the outlying districts of the city, on 
account of the fire ordinances limiting the construction of wooden buildings to certain 
jirescribed districts. 

Some estimates place the advance in the cost of building during the period specified at 
50 per cent. The advance in the cost of construction is due to the increased cost of materials 
and labor in the building trades during the time specified, the higher wages paid for labor 
in the manufacturing of those materials also entering into the cost of the building. 

An examination of the cost prices of various materials entering into the construction of 
buildings during the past decade exhibits some astonishing advances, thus : Spruce frames, 
ordinary, in April, 1894, cost from $13.50 to $14; 12 in., $14.25 to $14.50; and 14 in., from 
$15.50 to $16 for 1,000 feet; while in 1904 the cost has risen to $18 to $18.50, $20.50, and $24 
respectively for the different grades, an advance of 43 per cent upon a mean price. Spruce 
studding costing at the same time in 1894 from $10.50 to $11.50 costs in 1904 from $17 to 
$17. .50, an increase of BOVi per cent. Spruce boards, clipped, costing from $14 to $14.50 in 
1894 sell at from $20 to $23 at present, 54yio per cent higher. Other kinds and grades of 
lumber exhibit the following changes since the first date mentioned: 

Comparative Prices oj Building Materials. 

Carload lots. 
Framing, etc.: 1894. 1904. 

Spruce frames, ordinary $13.50 to $14.00 $18.00 to $18.50 

Spruce frames, 12 inch, 14.25 to 14.50 20.50 

Spruce frames, 14 inch, 15.50 to 16.00 24.00 

Spruce studding 10.50 to 11.50 17.00 to 17.50 



108 



STATISTICS OF LABOR. [Pub. Doc. 



Comparative Prices of Building Materials — Concluded. 

Carload lots. 
Framing, etc.: 1894. 

Spruce boards, clipped, $14.00 to $14.50 



Spruce lioards, random, . 
Spruce furring, . . . . 
Hemlock, Eastern, 
Clapboards, spruce, extra. 
Clapboards, spruce, clear. 
Clapboards, white pine, extra. 
Clapboards, white pine, clear, 
Laths, spruce 



11.00 
12.50 
11.50 
30.00 
28.00 
52.00 
47.00 
2.00 



to 



12.00 
13.50 



Finish : 

Michigan uppers, SoO.OO to $51.00 

Whitewood, 28.00 to 32.00 

Cypress 22.00 to 25.00 

Shingles : 

Extra cedar $3.30 to $3.50 

Clear, 2.75 

Hard-pine flooring : 

Kiln dried and dressed rift $45.00 

Kiln dried and dressed slash 25.00 

Dimension 23.00 to $25.00 



\ails : 

Nails, cut, iron and steel (keg), 
Xails, cut, extras and wire (keg] 

Paints and oils : 

American white lead in oil, 
American white zinc in oil, 
Painters' colors, . 
Linseed oil, .... 
Spirits turpentine, 



$0.90 
1.10 



$1.00 
1.15 



SO. 0.5% to $0.06V2 

.0534 to .oeva 

.09 to .131.4 

.50 to .55 

.34 to .40 



Brick, lime, and cement : 

Brick, common $7.28 to $8.50 

English Portland cement, 1.85 to 2.08 

Domestic Portland cement .80 to .86 

Builders' hardware as a whole is 33 per cent higher. 



1904. 

$20.00 to $23.00 
17.00 
17.00 
15.00 
44.00 
42.00 
60.00 
55.00 
3.25 to 3.50 



$83.00 to $90.00 
40.00 to 45.00 
36.00 



$3.25 
2.85 



$65.00 
28.00 
28.^0 



$1.80 
2.00 



$o.05yo to 

.06V4 to 

.09 to 

.40 to 

.59 to 



to $30. oa 



$0,063/4 
.07 
.14 
.42 

.el 



.75 to $8.00 



2.40 
1.20 



The cost of plumbing has advanced from 40 to 50 per cent, but this is partly due to 
changes in the requirements of the law. There has not been a very marked change in the 
cost of paints, and linseed oil is even lower by 11 per cent than then, a drop of 111,0 cents a 
gallon from a mean price of 521,2 cents being shown; but turpentine has gone up- from 37 
to 60 cents. 

There have been many notable changes in the prices paid for labor since 1894, when 
carpenters got $2.50 for a day of nine hours, a rate of 27% cents an hour; while in 1904, they 
get 37V2 cents, working eight hours only, an advance of about 35 per cent. Ten years ago, 
bricklayers received 42 cents an hour for eight hours' work a day, and tenders 25 cents for 
the same hours. To-day they get 55 cents and 30 cents an hour, respectively, an advance of 
very nearly 31 per cent for the former and 20 per cent for the latter. Stone masons were 
paid 42 cents an hour for eight hours' work in 1894, and their helpers received 25 cents an 
hour for the same length of day ; but in 1904 these rates had increased to 50 and 55 cents an 
hour for the stone masons, andSO cents for the helpers, the working-hours remaining the same, 
an advance of 18 and 31 per cent for the masons and 20 per cent for their helpers. Painters 
in 1894 received $2.40 a day of eight hours and decorators $3 a day of nine liours; in 1904 
the painters were paid $2.80 and the decorators $3 a day, hours unchanged, an increase for 
the former only of nearly four per cent. Roofers wei'e paid $2.50 and $3, their helpers 
$2.25 and $2..50, slaters $3 and $3.50, and their helpers $2.50 a day of nine hours for all in 



No. 15.] THE CAUSES OF HIGH PRICES. 109 

1894; in 1904, they receive practicall.v the same remuneration for eight liours' work, au 
advance of over 11 per cent. Plumbers 10 years ago got $4 for nine hours' work, aiul their 
helpers $1 for the same time, no charge to be made for less than lialf a day's work, while iu 
11)04 they receive $3.75 and $1, respectively, for eiglit liours' work, au advance of about 
5y2 per cent for the plumbers only. Plasterers were paid 4.5 cents and plasterers' laborers 
30 cents an hour for 47 hours' work a week in 1894, while iu 1904 they get 50 cents and 34 
•cents an hour, respectively, for 44 hours a week,- an advance of III/2 per cent for the 
former and 13i/<j per cent for the latter. 

Troni the foregoing, an average of the percentages of increase in the cost of 14 materials 
used in the construction of wooden houses is 35.9 per cent, while the advance in the wages 
paid in 11 working trades averages 18.11 per cent. 

Curiously enough, the mean of these two percentages is 27, approximately the estimated 
increase in the cost of the buildings, so that if the cost of the material and labor in a build- 
ing are about equal, as used to be estimated by some builders, these figures would appear 
to be just right. 

In any estimates bearing upon tlie comparative increase or decrease of rents during the 
period embraced by the years 1894 and 1904 as the extremes, the cost of the land upon wliich 
the houses are built is an important factor. Generally speaking, the cost of the buildings 
of either of these classes would be the same whether erected in South Boston or Dorchester, 
but in the former place the cost of the building lot would, on an average, be about $1,200, 
and would have a frontage of about 25 feet and a depth of 80 to 125 feet, the lot containing 
about 2,500 feet. In Dorchester, the expense for the land would be a little more; the lots 
would contain from 4,.500 to 5,000 square feet, and cost about $1,500 on a fair average. 

In South Boston, these flats in the first named class of buildings would rent as follows: 
For the louer floor, $16; for the middle fioor, $18; and for the top floor, $17 a month; while 
iu Dorchester, the rents would be: $20 for the first floor; $22 for the second; and $21 for 
the top floor. If heated by steam or furnace, about three dollars a month should be added 
to the rents above named. 

Ten years ago, buildings of the single class could have been built for from $8, .500 to 
$4,000, showing an advance in the mean cost of construction of 26% per cent. Nearly all of 
this increase has occurred during the past five j'ears. 

The rents received from the houses would have been about the same ten years ago as at 
the present time, the loss falling upon the owner of the property; but in consequence of 
the greater demand for houses at the present time, tlie owner can be more insistent in main- 
taining prices than he could have been at the earlier period mentioned, which is advan- 
tageous in the long run. Houses are today scarcer and more readily rented, and tenants 
are more generally able to pay the prevailing rents now tlian then, securing greater per- 
manency of occupation of the buildings. It is also true that there is a mucli larger percent- 
age of tenants able at tlie present time to paj^ fi-oni $25 to $45 a month for rent than iu 1894. 

Generally speaking, houses can be rented in South Boston 11 or 12 months in the year, 
while in Dorchester, as a rule, tenants can only be secured in the Spring and Fall, so that 
if a flat is vacated in October or November, it is not likely to be rented again until the fol- 
lowing Spring, whicli of course reduces the income from the property. 

The following from Tlie Wafchman of June 16, 1904, is of 
interest as regards the question of a cheaper building material : 

The large advance in the cost of lumber and iron building materials has greatly 
diminished building operations. In many places where more or less building has been 
done in every year for a series of years there is not now a house going up. The falling off 
In building contracts in Boston amounts to millions of dollars. Higher materials, shorter 
hours, and higher wages for workmen have added about 40 percent to the cost of building. 
Those who intend building are postponing it as long as possible in hope of some reduction 
in the price of material. To such the successful use of cement with steel strengthening 
will bring relief. The Ingalls Building in Cincinnati, 50 by 100 feet and 210 feet high, is built 
of steel bars imbedded in cement ami interlocked at the end, and has stood every test satis- 
factorily. The use of this material admits of molding into forms of beauty and grace, and 
promises a more attractive as well as a more durable stj'le of building than either wood or 
the tall steel structures wliich disfigure our modern American cities. The large use of 
cement in building will relieve the demand for lumber and have a tendency to lower the 
cost of all materials and so the expense of building. 



no STATISTICS OF LABOR. [Pub. Doc. 

Riibbei' and Elastic Goods. 

'So, 57. The general jsrosperity of the country among all classes has caused a more 
liberal use of all the articles referred to and less anxiety about their increased cost. This 
increased cost has been stimulated by increased wages; but increased wages in turn have 
assisted the people not to feel the increased costs perceptibly. 

Sfo. 78. The prices of goods that we manufacture have advanced very little, although 
different branches of the line of goods manufactured of rubber have advanced very ma- 
terially, because of the higher cost of production. In our special branch the increase is 
on account of labor troubles, advances in wages, and also the higher cost of raw materials, 
consisting mostly of woolen cloth. 

The other lines under the head of manufactured rubber articles which have advanced 
very materially have been caused by labor troubles which have made a demand for higher 
wages, and are also caused by the higher price of raw materials, viz., cotton and crude 
rubber. 

We are advised by the brokers that the advance in the price of crude rubber was on 
account of the larger demand for same for automobile tires, and that the production is no 
larger than when the demand was less. 

Sfo. 89. It seems to us that meats, provisions, and fish nowadays are handled by a 
class of men who, by methods of combination that approach monopoly, are able to get larger 
profits than formerly. It seems to us there is not so much advance in boots, shoes, clothing, 
etc., and what advance there has been, has been on account of the inci'eased cost in raw 
materials and labor. If we are able to believe the papers, the price of coal is high because 
of the combination among tlie coal-carrying railroads. Rents are higher on account of the 
increased cost of building material. A good many materials are higher on account of the 
increased price of labor. 

The increased consumption of raw materials lias led to a shortness in the supply and 
that means increase in the price. Everything is on a more extravagant or luxurious scale. 

The increased demand or consumption and the disposition to obtain larger profits may 
have something to do with the rise in prices. 

Shoes. 

Sfo. 44. I would say that the retail price of shoes is lower than at any time within three 
years. The consumer may be buying better shoes, but the same quality is now sold for 
less money. There has been a large increase in cost of labor, in all the building trades; 
consequently houses and rents cost more. Bituminous coal is about as cheap now as at 
any time for several years. The coal combination and the strike of antliracite coal miners 
curtailed supply of hard coal and more wood was used. This accounts for high priced 
coal and wood. Meat is lower in price than for some time. Shortage of cotton raised price 
of dry goods, and increased wages in nearly all lines of business made cost of production 
higher and cost to consumer higher. 

I think over-capitalization of nearly all corporations is the cause of higher prices to the 
consumer. I know of one manufacturing company doing about $50,000,000 annual business 
whose fixed charges are $5,000,000, or ten per cent of gross sales. In that line three or four 
per cent should cover fixed charges. 

]Vo. 34. The writer believes the most important factor in the increase in price of the 
necessaries of life is the shortening of the hours of labor, and the increase in wages per 
hour. There are undoubtedly other reasons, but 1 do not have the necessary information 
to warrant giving even an opinion. 

Manufacturers' prices for shoes are as low or lower than ever before, taking into con- 
sideration the advance in labor and leather. 

In this city, rents ruled very low for ten years prior to 1903, are now slightly higher, but 
no higher than ten years ago for same class of tenements. The people generally demand 
better tenements, which means, of course, higher rents. 

So. 26. Prosperous business has given more purchasing power. People are more 
willing to spendmoney and pay higher prices. Advantage has been taken of this condition 
to raise them. 

No. 35. It is our opinion that boots and shoes have advanced in cost materially in the 
last two years for two reasons if for no others. One is the 15 per cent duty placed on hides 
several years ago and the other is the increased cost of labor. 



No. 15.] THE CAUSES OF HIGH PRICES. Ill 

Sfo. 38. We liave a very clear conviction that certain articles controlled by com- 
binations of individual concerns have increased in price. We are not so confident as to 
a general increase in all commodities. For instance, in our own business — the manufacture 
of shoes — we have been obliged to buy our sole leather of a very limited number of tanners 
among whom a trust has a controlling influence. We are satisfied that the combination on 
hides increases the cost of shoes from one to five cents a pair. The unusually high price 
of cotton has also been an influence in the added cost of shoes, and the unusual activity in 
manufacturing has advanced the price of goat and kid skins^materially, but for the most 
part the consumer has been obliged to pay very little if anything more for his shoes in the 
past five years than before that time. 

It would seem as though the same conditions that increased the price of sole leather 
explain the advance in coal and all other articles that are exempt from general competition. 
We do not know that in a specific way there has been any material advance in groceries, 
provisions, fish, vegetables, and the like, but if there has, probably it is due to the fact that 
the consumption has been suflicient to warrant the placing of higher prices upon these 
commodities and labor has been so generally employed that the average operative has 
been able to purchase at the higher price. The old principle of supply and demand is, of 
course, the greatest influence in the regulation of prices. 

'So. 4. Regarding the shoe industry, — in my opinion, any claim that the prices on 
men's shoes have advanced cannot be substantiated; in fact, the prices have remained 
nearly stationary for some years. To the consumer the prices range as follows : $2.50, 
$3, $3.50, $4, and $5, the $3.50 grade having the greatest demand. In consideration of the 
fact that the cost of manufacturing has increased nearly if not quite 25 per cent during the 
past three years, mainly by advances in earnings of employees, the statement that the fin- 
ished product has not advanced may seem strange, but the increased cost has been largely 
met by the manufacturers by the introduction of labor-saving machines, greater care of 
details, closer utilization of stock, by adoption of new patterns, and less margin of profit. 

At present the demand for the $2. ,50 shoe is largely Increasing; this can only be met by 
using cheaper grades of stock and a larger production by manufacturers with less atten- 
tion to many details which will not afl:ect the service of the shoe as much as the general 
appearance. This will necessitate lower prices for many of the operations required in 
making the shoes, but will not necessarily mean lower earnings, as many things now 
required will not be demanded on the cheaper grades. 

Textiles. 

mo. 67. I think the principal reason lor advances in cost of the articles you mention, 
as well as in cotton and wool, is largely speculation, or buying and selling things they 
don't own. This can only be stopped by laws that will compel a delivery of every article 
sold. A second cause is the gradual destruction of competition by department stores, and 
by various other ways that all tend towards this end. Last but not least, trade unions. 
Anything that tends towards destroying individualism and the power to say mine and thine 
saps the foundation of republican institutions. 

In General. 

"So. 95. In my opinion there are numerous reasons for the advance in price of food 
products; the same, of course, would apply to other necessities of life. One potent cause 
is the strike, and, in many cases, consequent advance in wages. Few manufacturers or 
producers of any kind will under compulsion advance wages without also advancing the 
price of their products to compensate them. I know from personal knowledge that the 
various great business combinations have advanced prices owing to the fact that they have 
control of the market. The advance in these products used by many manufacturers com- 
pels the manufacturer to advance the price of his products. Another reason is the lack of 
competition on freight rates, and so far as I know the steady increase in cost of transporta- 
tion. One fact which should be borne in mind in considering the present conditions is the 
enormous volume of business done during the last few years without a coiTesponding 
increase in the volume of money. 

JTo. 97. The general rise in prices seems to us to have three causes: 

First : The general rise in the price of labor, accompanied in some cases by reduction 

of the hours of work, has undoubtedly increased the cost and price of products in almost 

every trade, as also rents. 



112 STATISTICS OF LABOR. [Pub. Doc. 

Second: The success of a few great monopolies in maliing an artificial price for their 
products; as shown in coal, beef, and kerosene oil. 

Third; The increase of prices, which experience has shown to take place in times of 
such business inflation as has prevailed for a few years past and nearly up to the present 
time. This last trouble has been found generally to correct itself by a few years of poor 
business, such as it seems likely that we have now entered upon. 

Bfo. 288. We are of the opinion that the supply of these commodities has kept up to 
the demand of tlie increased population of the country, but the advance in prices is largely 
brought about by the general willingness of the present generation to pay more for their 
supplies, and the fact that the combinations of trusts have led to the advanced prices; also 
that the laboring man does receive a higher percentage for his labor than formerly ; this, 
however, in our opinion, being but a small factor, as the mass of the people do not try so 
hard as our forefathers to get the full purchasing value of a dollar, and what were formerly 
considered luxuries are now considered necessaries. 

STo. 28. We believe that one reason for the advance is the shorter hours required by 
the labor unions, requiring increased forces in order to obtain the same amount of product 
as in old times. This, of course, would be only one reason, but this increase of employees 
makes added increase in expense to carry on the business, which must necessarily be 
added to the cost of the product; the consumer must eventually pay this increased cost, 
and this increased cost must necessarily be felt more particularly by persons earning 
only moderate wages and in medium circumstances. 

We know it to be a fact that provisions in this city are much higher than in other cities, 
and we are given to understand that this is to be accounted for by the word " trust." 
There seems to be no other good and suflicient reason why we should pay more for meats 
here than in New York and other places, freights being relatively the same. 

BTo. 62. I beg to say that in my opinion the advance is directly attributable, primarily, 
to the increased cost of labor, which has deteriorated in efficiency. Secondly, to the 
arbitrary action of the various trusts now controlling, for the most part, the items enu- 
merated. 

The present condition of the available supply as compared with the demand would in 
my opinion tend decidedly towards a reduction, rather than an increase, in the cost and 
value of these articles ; as there is assuredly no business in my knowledge which is not 
more or less dull. Our business is certainly more so than for four years past at same 
season. 

No. 620. Among many causes for the increased cost of living the following have 
more or less influence : 

First. Increasing extravagance of the people. 

Second. Labor troubles. 

Third. Prosperity. 

Fourth. Trusts and middlemen. 

Fifth. Increase in population. 

Sixth. Relatively fewer producers, and more drones. 

Bfo. 614. There must be something in our economical system that interriipts the natural 
relation or balance between supply and demand which is responsible for the existing high 
prices. From what 1 have read and casually observed I should think that the existing con- 
ditions were due to the effect of the so-called " trusts " or combinations of capital more 
than to any other one thing. 

Jfo. 588. The general reasons, in our opinion, are the advances in wages, the advances 
caused by trust control, and the scarcity coupled with increased demand for raw materials. 

No. 101. Combination of capital and labor are the two principal causes which have 
brought about the present conditions which make the high cost of living. 

No. 99. The improved condition of our working people; their greater demands for 
better clothing, food, and dwellings, together with their increased capacity for enjoyment 
of all kinds, by reason of their better education, are largely responsible for the conditions 
which appear to have made higher prices for all the articles mentioned in your letter. 



No. 15.] THE CAUSES OF HIGH PRICES. 113 

It seems to me logical that where you better people's couditions, they expect more, and 
to get this " more," more must be given them, whether through a demand on their part, or 
an increased return by reason of their greater intelligence permitting a greater efficiency 
in their labor. 

Rente of small dwellings and flats in Boston appear to be higher by reason of the strikes 
which have made it impossible for a large number of cheap and medium priced dwellings 
to be built, whether as isolated buildings or as apartment houses, than was the case 
several years ago, and I am told that it is difficult for a man receiving a moderate com- 
pensation to obtain even a fair house in a location where his children can be brought up in 
such a way as to make good men and women of them. 

The fuel question was made clear by the evidence brought out before the late investiga- 
tion in Xew York. 

The provision question in Boston, I am told, is largely controlled by an association of 
the marketmen which meets to fix prices for all dealing at the large markets. Naturally if 
these pi'ices are held " up," dealers of different classes in other parts of Boston will seek 
to secure a share of the business by a sufficient cutting of prices to get their share without 
unduly lessening their profit. 

The clothing question I think is governed by the supply and demand on one part, and 
the labor strikes on the other. 

3fo. 2. I beg to give you below my explanation of the present high prices of all 
articles called the " Necessaries of Life " Starting from panic prices with depression 
in all lines, we come first to restoration of confidence and credit, then increased employ- 
ment of labor, then increased consumption owing to increased purchasing power of the 
laboring classes, then still further increased demand for all necessaries, then the assertion 
by the laboring classes of their rights, the increase of wages, large purchasing power, the 
decrease under these circumstances of the stocks of raw material, and consequent higher 
prices. 

We then come to a position that is more or less cumulative so long as the demand equals 
the su|>ply. At present, I should say that we have caught up with the demand, stocks of 
raw products are increasing, competition is increasing, and we are fast approaching a time 
when manufacturers can keep pace with the demand by working less than the usual num- 
ber of hours per week. Crude products will accumulate, and prices will seek lower levels. 
Such depression will never quite equal the last depression, owing to the growth of the 
country. A great deal of the present reaction is due to the exactions of labor and the 
resulting strikes which decreased consumption of the necessaries of life, decreased pur- 
chasing power and unsettled business and confidence. In my own business we have had an 
abnormal consumption for the last two or three years. At present it is suffering from 
various labor troubles, especially those on the Lakes where the consumption is usually 
very large, but which is now being curtailed irretrievably. 

Xo. 10. The writer is strongl}- of the opinion that the man}- advances in prices are 
largely on the same lines that Mr. Baer represents as the reasons for the prices of coal — 
everybodj' gets as high a price as possible, and as the tendency has been upward these 
advances have been worked for all tliey were worth. 



SUMMARY. 

The opinions as to the causes of high prices expressed in 
the preceding quotations from the letters of our correspondents 
are those of 151 leading representatives of the mercantile and 
manufacturing industries of the Commonwealth. Although 
the writers were assured that no mention would be made of 
their names or residences, many expressed their willingness 
to have their names appended to their letters in tlie printed 
report. 



114 



STATISTICS OF LABOR. 



[Pub. Doc. 



There can, certainly, be no foundation for an accusation that 
these replies were obtained in order to prove any particular 
point or sustain any particular position. The circular letter 
was sent, at random, to 654 persons, and 151, of their own 
volition, replied thereto. Whether the result would have 
been different if all had answered, or if the investigation had 
been more extended, is an open question. We have to deal 
only with the replies received and they must be accepted as 
the candid opinions of the writers on a question which is of 
enoTossinof interest to all classes of the communitv. 

Although the number of different replies was but 151, the 
different reasons given numbered 254. They may be summar- 
ized as folloAvs under the three general heads of "Capital," 
"Labor," and "In General." The classification is naturally 
arbitrary. The guiding principle in making it has been one 
of fairness, but any reader who is dissatisfied with it, having 
the detail lines at his disposal, can combine them in accordance 
with his individual ideas. 

Causes of High Prices. 



Capital. 

Trusts, 

Restricting output of certnin commodities 

Stock joljljiug and trading ill futures, 

Over capitali'zation of corporations, 

Self protection in many lines of trade which induces dealers and manufacturers 

to charge as much as the consumer will pay 

Increased freight rates, 

Gradual destruction of competition by department stores 

Combinations of capital, 

The existing tariff, 

Advertising, 

Competition, 



Speculation, 

Monopoly, 

Trading "stamp companies, 

Merchants cornering the market to become rich quickly, 



Labor. 



Increased wages, 

Increased cost of labor, 

Shorter working hours, 

Labor unions, 

Labor troubles, 

Combinations of labor, 

In General. 

Stiffer prices attainable, 

General advance in all commodities, 

Increased prosperity of the people, 

Abundant crops 

Increase in the supply of gold, 

No advance in five years in boots and shoes, dry goods, and wearing apparel. 

Shortage in crops, ' 

Supply and demand have the greatest influence on prices, .... 



Number 
of Replies 

Stating 
Specified 

Caases 



4 
3 
1 

7 

1 
1 
6 
4 
1 
1 

117 

ai 

2C 
19 
•22 
11 

8 

60 
4 
h 

10 
3 
3 
1 



No. 15.] THE CAUSES OF HIGH PRICES. 

Causes of High Prices — Concluded. 



115 



Number 
of Keplies 

Stating 
Specified 

Causes 



In General— Con. 
Developing- the cities and leaving the country districts to become wildernesses, 

Tendency of American people to live beyond their means 

Inflation of the currency, 

People demand better things — shoes, clothing, houses, etc. 

Scarcity, and increasing demand for raw materials, 

Increase in ijopulation 

Relatively fewer producers and more drones, 

Extravagance of our municipal and Stiite administrations, 

Fewer producers and more consumers 



We next present a recapitulation, with percentages. 



Number 
of Replies 

Stating 
Specified 

Causes 



Percentages 



Connected with capital. 
Connected with labor, 
In general, . 

Totals, . 



117 

60 



30.3-2 
46.06 
23.62 



To summarize, 151 persons prominent in the mercantile 
and manufacturing industries of the Commonwealth gave 254 
opinions as to the causes of high prices. 

Of these opinions, 77, or 30.32 per cent, convey the im- 
pression that high prices are caused by combinations of capital ; 
117, or 4(5.06 per cent, that they are due to labor combinations, 
while GO, or 23.62 per cent, attribute existing conditions to a 
variety of causes, general in their nature, and not directly 
attributable to either capital or labor. 

It is, undoubtedly, a generally accepted opinion, founded 
largely upon constant reiteration in the newspaper press, that 
the retail prices of all articles required by the family, usually 
called "the necessaries of life," have been greatly advanced 
during the last few years. 

We present in the following table the opinions, or rather 
expert statements, of 117 of our correspondents as regards 
this question. The fact should not be forgotten that the 
authors of these statements are dealers in or manufacturers 
of the articles for which price comparisons are given, and, 
for that reason, what they declare to be existing conditions 



116 



STATISTICS OF LABOR. [Pub. Doc. 



is more likely to be the truth than the estimates or assertions 
of those practically unacquainted with the various Hues of 
business considered. 

Price Comj}arisons. 



Number 
Reporting 

Present 
Condition 



Boots and shoes, 
Butter, . 



Canned goods, 
Cereals, . 
Cheese, . 
Clothing, 
Coal, 
Coflfee, . 

Dry goods, . 

Eggs, . . 

Flour, 



Fruits, . 
Groceries, 



Iron and steel, 

Leather, . 

INteats and provisions, 



Rents, 

Rubber, . 
Teas, 

Vegetables and fish. 

Wood, . 
Wool, 



No advance, 

Shoes lower than any time within three years. 

Shoes never lower. 

Cheaper than for tive years, 

Cheaper tl\an last year, 

Lovcer than for years, 

Lower than in June, 1901, 

Very low with the exception of corn and salmon 

Same as iu previous years. 

Lower 

No advance, 

Soft coal lower than last year, 

Very low. 

On same level. 

Higher, owing to price of cotton. 

No advance. 

Higher, 

Lower than in June, 1901, 

Higher (decreased sup|)ly), 

Higher (price of wheat), 

Cheaper than at any previous time. 

No advance In oranges, . . . . 

Deciduous fruits higher (short crop), . 

Bananas much lower (quality better), . 

Miscellaneous groceries average same for the 
last five years, 

Higher (excessive advertising) 

Lower than at any time in the past 10 years, 

Vinegar very low 

Rice lowest in the history of the business, . 

Sugar and flour very reasonable 

Lard very low 

Salt so Tow manufacturers have gone out of 
business, 

Spices vary very little 

Dried fiiiits very low, 

Beans and peas very reasonable 

Sugar higher (advance in raw), . . . . 

Molasses higher (Porto Rico — short production), 

Molasses much lower than last year (Barbadoes 
and Antigua), . . . . " . 

Higher (combinations, and increased cost of 
labor), 

Higher (duty on hides), 

Meats higher (combinations and lack of com- 
petition), 

Meats higher (increased cost of grain), 

Provisions lower than for last four years, . 

No advance, 

Lower 

Higher (tenants require better accommodations) , 

Higher (increased cost of building and taxes), . 

Higher (increased valuation and taxes). 

Higher (demand greater than supply),. 

Lower, 

Were never lower. 

Potatoes higher (cold season), 

Potatoes higher (short crop) 

Potatoes higher (cost of labor and potato bugs). 

Fish (no material change), 

Fish, higher (cold-season and scarcity). 

Higher (scarcity), 

Higher (loss of "forests). 

Higher (duty on raw material). 



The statements in the preceding table may he summarized 
as folh)ws : 



No. 15.] THE CAUSES OE HIGH PRICES. 



117 



Classification. 


Number Making 

Specified 

Statements 


Percentages 


Higher, 


.is 
38 
'21 


40.ii7 




32. 4H 


No advance 


(same 


level) ' . 


17. '.jr. 


Totals, 


117 


100.00 











A consideration of the reason.s given for the rise in prices 
will be found interesting. It is given, in detail, in the table 
which follows : 



Causes (in Detail) for High Pricks. 



Number 
Stating 

Specified 
Causes 



Combinations of capital (cotton), 

Combinatione ot capital (wheat), 

Combinations of cajiital (suicar), 

Combinations of cajiital aixl lack of competition (meats and provisions), . 

Coml)ination8 of ca|)ital and labor (iron and steel), 

Scarcity (supply and demand — wood, fish, potatoes, molasses. Hour, deciduous 

fruits, and rubber), 

No reason given (eggs), 

Excessive advertising (groceries), 

Duties (leather and wool) 

Cost of grain (meats), 

Better accommodations required (rents), 

Increased cost of building and taxes (rents), . 

Increased valuation and taxes (rents), 

Cost of labor and insect pests (potatoes), 

Loss of forests (wood), 



Total, 



The reasons given in the previous table, it will be observed, 
are from the 58 .who, in the table headed " Price Comparisons " 
on page 116, stated that prices were higher. 

At this point, a summary of results may be of value to the 
reader. 

1. The number of replies was 151. 

2. The number of reasons given was 254 ; connected with 
capital, 77; connected with labor, 117 ; in general, 60. 

3. The number making particular reference to certain com- 
modities in their replies was 117 ; number stating higher prices 
of certain articles, 58 : lower prices, 38 ; no advance (remained 
on same level), 21. 

We are now prepared to consider thp replies, in detail, of 
those who stated that the prices of certain articles were higher. 
A study of the table last given brings out the fact that 11 con- 
sidered high prices due to combinations of capital; two to 



118 STATISTICS OF LABOR. [Pub. Doc. 

combinations of capital and labor; 21 to scarcity dependent 
upon supply and demand : three to the prevailing tarift' duties ; 
13 to better accommodations, increased cost of building, in- 
creased valuation, and higher taxes, all in connection with 
rents ; five gave four different reasons, while three made the 
statement without an explanation. 

Having presented the opinions of our correspondents in 
extenso and also in the form of recapitulations which show the 
consensus of opinion in such condensed form as to be easily 
understood, it seems advisable to bring into the discussion of 
the question data derivable from outside sources. 

We present, tirst, information relating to the agricultural 
exports of the United States from 1851-1902. The statistics 
given are based upon the official export returns published 
annually by the Bureau of Statistics of the United States Treas- 
ury Department. With such an outflow to foreign countries, 
it will be readily seen the domestic prices must be materially 
affected. Even with our increased population, and increased 
consumption from various causes, if this great product were 
thrown into our home markets the}" would be glutted, and the 
downfall in prices would be disastrous to producers and dis- 
tributors. The introduction to, and table of, exports follow : 

Recent successes of the United States in competing for tlie world's markets liave aroused 
unusual interest in the histor.v of the export movement. Asa result of this interest numer- 
ous requests are received for statistics of exportation covering a long series of years. To 
meet the demand for such information, so far as products of agriculture are concerned, the 
compilations embodied in the present bulletin have been made. These compilations em- 
brace the annual export returns, as officially reported, from 18.51 to 1902, inclusive. They 
show the value of the agricultural produce exported from the United States during the 
years mentioned in comparison with the total exports of domestic merchandise and also 
separately the quantity and value annually shipped of each one of the numerous products 
of agriculture for which official export statistics were recorded. 

Notwithstanding the great increase in population, and the consequently larger demands 
of the home market, the development of agricultural productivity in the United States 
during the past 50 years has far outstripped domestic requirements, leaving an increas- 
ing surplus to be disposed of in foreign markets. •According to the returns for 18.t1, which 
compi-ise the earliest record given in the present report, our agricultural exports for that 
year were valued at $147,000,000, while in 1',10'2, the latest year for which statistii^s are 
available, the value amounted to $857,000,000. The striking difference between these two 
records shows how rapidly this branch of our commerce has developed. The present 
value of the trade is nearly six times as large as the value 50 years ago. 

While our export trade in agricultural produce has grown marvelously, a still larger 
growth proportionately has occurred in the exportation of manufactured products, and 
thus the percentage that agricultural produce comprises of all merchandise exported is 
considerably less to-day than it was a half century ago. Of the merchandise sent abroad 
in 1851 products of agriculture formed about 82 percent, whereas in 1902 the proportion 
agricultural was only 63 per cent. The change indicated by these percentages has been 
particularly rapid during the last two decades. It is explained in part by the more ex- 
tensive manufacture in the United States of certain raw materials of agricultural origin 
previously shipped in larger quantities to foreign countries. 



No. 15.] THE CAUSES OF HIGH PRICES. 



119 



An iuteresting feature disclosed by the records of our agricultural export trade for the 
past ."JO years is the increased importance of animal products in that trade as compared 
with vegetable products. In 1851, 95 per cent of the agricultural exports consisted of 
vegetable matter and only Ave per cent of animal matter. Of the exports for 1902 vege- 
table matter comprised about 71 per cent and animal matter about 29 per cent. These 
figures show the extent to which our export trade has been aflected by the growing 
prominence of stock raising in American agriculture. 

Exjyorts of Agricultural Products, IS 51-1902. 



Cattle, live . 

Hogs, live . 

Sheep, live . 

Beef, fresh . 

Beef, salt or pickled . 

Beef, cured . 

Beef, canned 

Pork, fresh . 

Pork, salted or pickled 

Bacon and hams. 

Mutton, 

Lard, .... 

Butter, 

Cheese, 

Egg^ .... 

Apples, fresh 

Apples, dried . 

Corn (maize), 

Rve, .... 

Wheat, 

Corn meal, . 

Oatmeal, 

Flour, wheat 

Sugar, refined . 

Potatoes, 



Number 

Number 

Numlier 

Pound 

Pound 

Pound 

Pound 

Pound 

Pound 

Pound 

Pound 

Pound 

Pound 

Pound 

Dozen 

Barrel 

Pound 

Bushel 

Bushel 

Bushel 

Barrel 

Pound 

Barrel 

Pound 

Bushel 



Quantities Exported for the Yeabs 



1,350 
1,030 
4,357 



18,027,302 

19,683,082 
3,994,542 
10,361,189 

28,842 

3,426,811 

1,026,725 
203,622 

2,202,335 

2,689,541 

106,342 



20,.530 

8,770 

45,465 

43,880,217 



39,2.50,750 
71,446,854 

80,037,297 

3,965,043 

63,698,867 

5,017 

49,088 

1,150,122 

9,826,309 

49,674 

34,304,906 

211,811 

3,653,841 

3,797,278 

553,070 



374,679 

95,6.54 

60,947 

194,045,638 

90,286,979 

1,621,833 

109,585,727 

818,875 

81,317,.364 

599,085,665 

199,395 

498,343,927 

15,187,114 

82,133,876 

.363,116 

135,207 

6,973,168 

30,768,213 

332,739 

55,131,948 

318,329 

7,736,873 

11,344,304 

108,228,620 

341,189 



392,884 

8,368 

.358,720 

301,824,473 

48,632,727 

818,382 

66,645,838 

44,171,674 

115,896,275 

610,803,8,56 

430,351 

5.56,840,222 

16,002,169 

27,203,184 

2,717,990 

459,719 

15,664,468 

26,636,552 

2,697,863 

154,8.56,102 

348,034 

.59,516,512 

17,759,203 

7,213,0.50 

528,484 



* Barrels was the basis in 1851, pounds the other years. 

In endeavoring to ascertain the increase or decrease in prices 
between certain years tlie attempt is made to obtain tliem on 
a basis proportioned to consumption. 

From the Monthly Summary of Commerce and Finance of 
tlie United States (June, UJ04 — p. 4851) we extract the fol- 
lowing relating to Dun's Index Number, from Dun's Review : 



In the following table the course of prices of commodities is shown with due allowance 
for the relative importance of each. Quotations of all the necessaries of life are taken, in- 
eluding whisky and tobacco, and in each case the price is multiplied by the annual per 
capita consumption, which precludes any one commodity having more than its proper 
weight in the aggregate. For example, the price of a bushel of wheat is multiplied by 5.55, 
representing the annual per capita consumption of 4% bushels for food, and the remainder 
as allowance for seed. The price per pound of coffee is taken nine times, of cheese 2.3, of 
chemicals only fractions of an ounce in some cases. Thus, wide fluctuations in the price of 
an article little used do not materially affect the index, but changes in the great staples 
have a large influence in advancing or depressing the total. For convenience of com- 
parison and economy of space the prices are grouped in seven classes: Breadstuffs 
include many quotations of wheat, corn, oats, rye, barley, beans, and pease; meats include 
live hogs, beef, sheep, and many provisions, lard, tallow, etc.; dairy and garden products 
en)brace eggs, vegetables, fruits, milk, butter, cheese, etc.; other food includes fish, 
liquors, condiments, sugar, rice, tobacco, etc.; clothing covers the raw material of each 



120 



STATISTICS OF LABOR. 



[Pub. Doc. 



industry, and mnuy quotations of woolen, cotton, silk, and rubber goods, as well as hides, 
leather, boots, and shoes; metals include various quotations of pig iron and partially 
manufactured and finished products, as well as the minor metals, tin, lead, copper, etc., 
and coal and pretroleum ; miscellaneous include many grades of hard and soft lumber, 
lath, brick, liine, glass, turpentine, hemp, linseed oil, paints, fertilizers, and drugs. The 
third decimal is giveu for accuracy of comparison; thus, $101. .587 representing S101..5S and 
seven-tenths of a cent. This figure does not purport to show the exact average annual cost 
of living on January 1, 1902, because wholesale pri(;es are taken and all luxuries omitted. 
Its economic value is in showing the percentage of advance or decline from month to 
month. 

From Dun's reports we compile the following quotations 
for certain commodities for the years 1897 to 1904, the par- 
ticular da}' of comparison being July 1 . 



Dates. 


Bread- 
stuffs 


Meats 


Dairy 

and 

Garden 


Other 
Food 


Clothing 


Metals 


Miscella- 
neous 


Totals 


Julv 1, 1897, . 
JulV 1, 1898, . 
July 1, 1899, . 
Julv 1, 1900, . 
Julv 1, 1901, . 
July 1, 1902, . 
July 1, 1903, . 
July 1, 1904, . 


$10,587 
12.783 
13.483 
14.898 
14.904 
20.534 
17.473 
18.244 


$7,529 
7.694 
7.988 
8.9(K! 
9.4:^0 

11.628 
9.269 
9.033 


$8,714 
9.437 
10.974 
10.901 
11.030 
12.557 
13.083 
10.648 


$7,887 
8.826 
9.1.57 
9.482 
9.086 
8.748 
9.186 

10.406 


$13,808 
14.663 
15.021 
16.324 
15.098 
15.533 
17.1.36 
16.514 


$11,642 
11.843 
15.635 
14.834 
15.344 
16.084 
16.544 
15.428 


$12,288 
12.522 
12.969 
16.070 
16.617 
16.826 
16.765 
16.919 


$72,455 
77.768 
85.227 
91.415 
91.509 

101.910 
99.456 
97.192 



In considering this table the reader should remember that 
the quotations are based upon icJiolesale prices, " pro})ortioned 
to consumption." They certainly include many articles which 
do not enter veiy largely into the ' ' necessaries of life " of a 
workingman's family; such, for instance, as oats, rye, barley, 
tallow, hides, pig iron, metallic goods, tin, lead, copper, hard 
and soft lumber, lath, brick, lime, glass, turpentine, hemp, 
linseed oil, paints, and fertilizers. If it is desired to secure 
an accurate percentage indicative of the cost of living, the 
articles mentioned above should be eliminated from the quota- 
tions. In no way do they show what are generally understood 
as entering into the cost of living of a family, and their use 
for that purpose is vicious and misleading. 

Part III of the report of this Bureau for 1901 (issued late in 
1902) contained an article on " Prices and the Cost of Living 
for the Years 1872, 1881, 1897, and 1902." On page 310, the 
following statement is made : 

"The comparisons indicate an increase in prices (in 1902) 
as compared with 1897 of from 13.83 to 15.37 per cent." 

The Bulletin of the L"^nited States Bureau of Labor (No. 53 
— July, 1904) on page 710 gives the increase in the retail 



No. 15.] THE CAUSES OF HIGH PRICES. 121 

prices of food in UK)3 as compared with 1897 as 14.5, or about 
one per cent less than the highest figure given in the Massa- 
chusetts Report for 1901. 

Mr. Horace G. Wadlin, chief of this Bureau in 1901, took 
strong ground against the use of wholesale quotations to de- 
termine increase or decrease in the cost of living. He said, 
in the Report for 1901 (pages 311, 312) : 

A brlet explanation is perliaps required with reference to the results shown in the com- 
parison of prices between 1902 and 1897. Certain comparisons of wholesale prices of 
leading commodities of general consumption have from time to time been published which 
may seem to indicate a greater percentage of increase than appears in the preceding pages. 
By one sucli comparison tlie cost of living is made to show an increase of about 36 per cent 
in recent years, which, if correct, would mean, as applied to the ordinary family, that if 
the annual expenses could have been met by $800 in 1897, $1,088 would l)e required now, a 
result tliat is improbable. Furthermore, it should be borne in mind, that a comparison of 
wholesale prices alone does not touch the particular point with which this report deals, i.e., 
the direct cost of living to workingmen. Retail prices move differently from wholesale, and 
are not subject to as many or so great fluctuations, the margin between the wholesale and 
retail rates being in many cases so great as to compensate for changes in the wholesale, 
unless the latter are very wide and have become permanent. 

Besides this, certain articles which may have an important effect upon a so-called 
"index number" or general average, representing the movement of wholesale prices in 
the coiintry at large, enter into the ordinary household expenses of a workingman, either 
indirectly, very sUghtly, or not at all, although they may enter largely into general con- 
sumption. An attempt is usually made to give what may be called the diflferent consumptive 
values of tlie various commodities their proper weight upon the general average of the 
group or class to which they belong, by some system of computation. Dun's index number, 
for example, is produced by selecting a list of articles, including whisky, beer, and tobacco, 
each quotation, instead of having equal prominence in the average, being multiplied by the 
quantity annually consumed per capita in the country. Wholesale quotations are used. 
The per capita consumption of each commodity, necessarily more or less a matter of 
estimate, is taken for the purpose of giving to each article its proper weight upon the 
general average. 

Whatever accuracy this method may possess as indicating changes in the general price 
level and their effect upon the cost of consumption in general, it cannot be relied on im- 
plicitly as representing changes in the cost of living of the ordinary family. For example, 
the index number for breadstuffs thus computed shows an inci-ease of about 70 per cent in 
1902 as compared witli 1897. Of course, computed in this way, the index number must be 
largely affected by the great increase in the wholesale price of Indian corn, which enters 
largely into general consumption, but forms a comparatively slight factor in the ordinary 
household budget. Not only this, but the Indian corn consumed in the country at large 
enters, to a certain extent, into the cost of meats, and a combination of index numbers, 
based upon the aggregate consumption of the country, results in duplications which unduly 
raise the index or average representing the aggregate cost of breadstuffs and meats when 
taken together. 

Notwithstanding this increase in the index number for breadstuffs the retail price of 
wheat flour in our returns was found to be lower than in 1897, and this decline is borne out 
by a comparison of wholesale prices in Boston, taken at dates corresponding to those for 
which our retail prices were secured. And although Indian corn meal, at wholesale, shows 
a considerable increase, the retail price per pound as sold in limited quantities for ordinary 
household consumption (always higli as compared with the wholesale*) shows no change 
in our quotation. The quotations for certain other articles which show increases at retail 

* At the average wholesale rate a barrel of granulated Indian corn meal would cost 
$3.25 in 1902. By the average retail pound rate shown in our tables the retailer would 
receive $6, an advance of nearly 8.') per cent, a margin sufficiently wide to keep the retail 
market comparatively steady, considering the relatively small demand for the article in 
household consumption. 



122 STATISTICS OF LABOR. [Pub. Doc. 

were more tbau offset by others showing decreases, when the average is weiglited accord- 
ing to household consumption as explained on page 254. Our retail prices are based upon 
more than 7,000 actual quotations in markets jjatronized by workingmen and, we are con- 
fident, represent more nearly the direct effect of prices upon household expenses, than any 
comparison of wholesale prices, however made. 

As stated at the beginning of this article the newspaper 
press of the country has taken a great interest in the questions 
of Wages and Cost of Living. 

We quote from the 'New Haven (Conn.) Register an article 
entitled " Why Living Costs More." 

We have not a very high regard for statistics. We have seen the same figures used too 
often to prove different things for that. We have, however, a high regard for the accuracy 
of the statistics which Carroll U. Wright, Commissioner of Labor, collects, from which 
every man has a constitutional right to draw his own conclusions. In his report of his 
department, recently made, he gives the results of a comprehensive inquiry into the cost 
of living since 1890, and into tlie average wage rates during those periods. The lowest 
average price of food from 181)0 to 1903 was in 1896 when it was 95.5 per cent of the average 
price from 1890 to 1899. The highest price was in 1902, when it was 110.9 per cent of the 
average price for the period. The average cost of food per family in 1890 was $318; in 
1895, $296; in 1902, $314; and in 1903, $342. 

The fact which impresses us in this connection is the artificial standard of life which 
has been established. We take it, of course, that while Mr. Wright's investigations were 
purely scientific in character, the use to which they will be put this fall will be the political 
one of demonstrating that living is not more expensive than it was ; that whatever increase 
in the expense of living has resulted from new economic conditions, the increase in wages 
has been greater, and that in conseciuence the condition of the workman is a happier one. 
More important, from our point of view, is the fact that the increase in the cost of things 
has not come from their scarcity, and hence determined by the law of supply and demand, 
but from the ability of commercial organizations to artificially control prices. So, on the 
other hand, the increase in wages has come, not from a scarcity of labor, but from the 
power of organized labor to create an artificial wage. Together these two forces have 
raised the e.xpense of living, possibly to their own benefit, but without consideration for 
either the independence of the unorganized producer or caterer, or the welfare of the unor- 
ganized wage earner. This is where the irritation and injustice of this artificial standard 
comes in. The great number of what we may call middle men, who work, not for wages 
so much as they do for salaries, is the class seriously harmed. Their income has not yet 
increased while the cost of living has increased very seriously. It is not possible for them 
to organize and enforce the power which that condition creates. What, then, is to become 
of them in this struggle to advance prices and wages? Where is the natural law, upon 
which they must depend for protection, to be operated, and how? 

The Chicago Evening Post calls attention to a phase of this artificial condition as it 
affects even organized labor, which again seems to illusti-ate the dangers of this new and, 
as we regard it, unknown economic condition. It says editorially: "In the statement 
given out by the striking butx'her workmen this sentence occvu'S : ' Hundreds of thousands 
of men are out of work, and will soon be willing to work at any wage.' And this is im- 
mediately followed by the question, ' Shall the packers be allowed to use this oversupply as 
a club with which to reduce the wages of their men? ' As this statement conies from the 
side of the workmen, we may assume that it is not exaggerated. The supply of labor from 
which the packers may draw is much in excess of the demand for it. Under a free working 
of natural law an oversupply of labor means competition for positions, and competition 
tends to reduce the market price of labor. The unions engaged in this strike do not intend 
that natural law shall operate if they can prevent it. Notwithstanding that ' hundreds of 
thousands ' of men are out of work and almost ready to ' work for any wage,' the unions 
are trying to maintain a market in the lace of an increased supply and a deci'eased demand. 
Is this a sane course; is it wise; can the object of the strikers be attained under the con- 
ditions? Through intimidation and other methods known only to unionists the bulk of the 
' hundreds of thousands ' of idle men may be kept away from the stockyards; but this does 
not decrease the number seeking employment; it will not change natural conditions." 



No. 15.] THE CAUSES OF HIGH PRICES. 123 

It is such ugly facts as these which should cause the organization of capital as well as 
the organization of labor to cease for a time from thecoullict, in order to more clearly 
realize the fearful dangers they arc perhaps developing. This realization is necessary, not 
for the purpose of protecting the oiitsiders, hut of protecting themselves. There is mucli 
good to flow from organization, and it is easily seen of all men, but when the object is to 
establish an artificial condition of life, and then maintain it by sheer brute force, the ques- 
tion may be raised, how much longer can the goose which laid the golden egg live? 

We also quote from the New York Journal of Commerce 
and Commercial Bulletin of June 16, 1904, an article with the 
caption, " Business Prospects and Costs of Production." 

The conditions that have brought about the present business situation have been devel- 
oping for at least three years and are quite independent of politics. The reaction that 
began to be felt early last year, and has made itself felt with an increasing tension ever 
since, was caused by a check upon domestic consumption, due to the high level to which 
prices were pushed by combinations of capital and labor, just as the previous industrial 
activity was started and impelled onward by the reviving and growing demand for con- 
sumption under the low prices of a period of depression. The demand for the products of 
industry grew more rapidly than the supply could be furnished, which stimulated produc- 
tion and at the same time made it profitable b}^ advancing prices. Certain leading indus- 
tries, shielded from foreign competition, took advantage of the opportunity to enlarge their 
facilities and effect strong combinations, with a view to reaping large profits fi'om the 
abnormal prices that it was possible to obtain while the demand for consumption continued 
to grow. This was notably the case with the "basic industry" of iron and steel, which 
affords the best illustration of the general movement. A " boom " was worked up and it 
was then that great combinations were formed with vastly inflated capital, the jiurpose of 
which was to secure enormous profits in jiromotions, in flotation of securities, economies of 
production, and the maintenance of high prices under the shelter of the tariff. The iuci'ease 
of prices and of profits and the demand for labor led inevitably to a general increase of 
wages. It was natural that it should be demanded, and the increasing cost of living stimu- 
lated it. Then labor oi'ganization strengthened itself and made its own combinations for 
enforcing demands in the industries it could control for the fullest share in the returns 
from production. This reacted upon the cost of producing, pushed prices still higher, kept 
up their level and put the check upon consumption that was to stop the wheels of activity 
and reverse the current of prosperity. 

It is not necessary to dwell upon the eifects of overdoing in corporate promotions and 
combinations and the issue of enormous volumes of inflated securities. The prolonged 
indigestion in the stock markets, the violent reaction in seciirity prices, the difficulty of 
raising funds by new issues for legitimate enterprise, the dreary dullness on the exchanges 
and the drastic liquidations that have been going on for many months, make this a familiar 
tale. The severe process of purgation has gradually wrought its ert'ect and security prices 
have been brought down to what is perhaps their normal level. That cannot of itself pro- 
duce a revival, because the stock markets do not stand alone. Their values depend upon 
industrial production, and reaction in the industrial field lias apparently not run its course. 
What that reaction is due to is as manifest as the cause of the reaction in the market for 
corporate securities, whose value depends upon the production that gives life to business 
in general. It was brought about by the high prices which raised the cost of living and 
put a brake upon consumption. These in their final extreme were the resultant of the 
efl'orts of combinations of capital and combinations of labor to extract the utmost from that 
portion of the consuming community which was outside of their vicious circle, the great 
mass of unorganized and uncombined producers and consumers. The two sets of com- 
binations were engaged in a process of strangulation of the country's prosperity, and the 
conflicts between them or among them, the strikes, lock-outs' and shutdowns, began to 
reduce production at the same time that they made it more costly. 

These forces have done their injurious work upon the general course of industry and 
trade, as well as upon the operations of the exchanges, and they are now striving to 
arrest the only process by which the situation can be remedied. Prices, cost of production, 
and wages must come back to a normal level before industrial, commercial, and financial 
health can be permanently restored. The process must begin with prices, for there is 
where consumption is directly touched. People do not buy as much as formerly, because 



124 STATISTICS OF LABOR. [Pub. Doe. 

they cannot on account of the cost of what they consume. High prices force them to 
economy and cripple their consuming capacity. Nobody restricts his consumption 
because he lilies to. To increase demand and restore activity, prices must come down. 
They have been yielding here and there, l)ut the combinations still strive to keep them up 
and so hold revival in check. In iron and steel, for instance, at the bottom of the industry, 
where competition cannot be prevented, pig iron has fallen from $25 a ton at the highest to 
$9.25 for foundry at Birmingham, and from $21 to $12 for steel-making Bessemer at Pitts- 
burg, and there has been some concession in steel tiillets and blooms; but, where the grip 
of combination is tiglit and competition can be held under, as in steel rails and structural 
forms and most advanced manufactures, tliere is no substantial reduction. Hence many 
furnaces are cold, steel works are silent, and thousands of men are idle. Labor unions 
cling to liigh wages as combined capital clings to high prices, but there is no way of 
reviving activity and restoring prosperity except by awakening consumption by lowering 
its cost. Wages, which are an important factor in cost, must ^ield in order that prices may 
be lowered by something more than. spasmodic cuts. This alone will give labor full 
employment, start the wheels of industry and keep them going, and give trade a normal 
and steady activity. The situation has been brought about by abnormal prices and wages 
forced by combinations. It must be remedied by a yielding of prices and wages to a 
normal level and a new adjustment of consumption and production. These cannot long 
be dislocated, and prosperity can only attend their working harmoniously together. There 
is no greater delusion than that which rejoices in a high cost of everything, measured in 
money. The happiest state is that of large production and distribution at the lowest cost, 
and the freest competition of the forces of production and inter<'hange. Good crops next 
autumn may afford some relief to business depression, but no lasting improvement is 
possible until costs of production go back to the normal. 

A con.sideration of Prices would not be considered complete, 
unless reference was also made to the closely related questions 
of AVages, Earnings, and Cost of Living. We have no per- 
centages on any of these points to bring into comparison, but 
we have collected certain data bearing upon each of the four 
points mentioned which, in our opinion, have a marked influ- 
ence upon each, and upon their co-relations. 

Wages. 

Quotations of wages by the piece, hour, or day, whether in 
detail, aggregates, or percentages, have no positive, conclusive 
value in determining the financial condition of workingmen. 
Rates by the piece with the amount of work done an unknown 
quantity, bv the hour without the number of hours worked 
during the week, or by the day without the number of days 
employed in a week, are evidently lacking a vital factor in the 
problem. It is not safe, nor honest in a statistical sense, to 
assume that by any system of aggregation or multiplication 
these rates will indicate the weekly earnings — and a man's 
earnings are what he gets in money — not what may be figured 
out mathematically on paper. 

To show the fallacy and absolute unreliability of rates of 
wage quotations, whether gathered on the piece, hour, or day 



No. 15.] THE CAUSES OF HIGH PRICES. 



125 



plan, we present a table drawn from the Annual Statistics of 
jManufactiires (Mass. 1903), givino- eonijmrative statistics of 
employment and unemployment in the nine leading industries 
of the State, for the years 1902 and 100;]. 





1908 1 


1903 


iNDnSTRIKS. 


Mniilh 
of Greatest 

Em- 
ployment 


Month 
of Least Em- 
ployment 


rercent- 
ages of Un- 
employ- 
ment 


Month 
of Greatest 
Em- 
ployment 


Month 
of Least Em- 
ployment 


Percent- 
ages of Un- 
employ- 
ment 


Boots and shoes, . 

Carpetings, . 

Cotton goods. 

Leather, . 

Machines and ma- 
chinery, 

Metals and metallic 
goods, . 

Paper, 

AVoolen goods, 

Worsted goods. 


October 
July 

November 
January 

November 

April 
December 
December 
Novemlier 


June 
January 
September 
July 

January 

August 
July 
January 
May 


10.68 
4. SI 
2.98 

14.13 

13.22 

fy.U 
10.16 
7.43 
9.99 


October 
July 

February 
June 

January 

June 

December 
July 
March 


June 
October 
May 
April 

November 

December 
July 

December 
August 


4.. 55 

6.78 

12.82 

3. 86 

6.18 

6.31 
24.30 

6.59 
11.91 


All Industries, 


November 


January 


4.99 


March 


August 


3.15 



In the Boot and Shoe industry, in 1902, the month of greatest 
employment Avas October, but in June, 10.68 per cent of the 
employees were out of work. In 1903, October was again the 
month of greatest employment, but in June, 4.55 per cent of 
the employees were unemployed. The percentages of unem- 
ployment for each month in each year are given in the volume 
from which this table is compiled. 

The lines for the other industries may be read in a similar 
way. The reader should note the fact that while December, 
1903, was the month of greatest employment in the Paper 
industry, in July of that year 24.30 per cent, or nearly one- 
quarter of the operatives, were out of work. With such vary- 
ing conditions as to employment and unemployment it is 
statistically impossible to determine, honestly, a working-man's 
earnings from wage quotations by the piece, hour, or da}'. 

Earnings. 

Actual weekly or yearly earnings are the only positive and 
conclusive indication of the financial condition of Avorkingmen 
— meaning by earnings the amount actually received by them 
in money after all deductions are made for materials, fines, 
damages, etc. 

Since 1885 this Bureau has collected statistics of the yearly 



126 



STATISTICS OF LABOR. [Pub. Doc. 



earnings of workingmen in all branches of manufacturing in- 
dustry in the State. The following table shows the increases 
or decreases in j^early earnings for 90 industries in the year 
1903 as compared with 1902. 



Classification. 



Number of Industries 


Number of Industries 


in which 


in which 


Employees had 


Employees had 


Specified Increased 


Specified Decreased 


Earnings in 1903 as 


Earnings in 1903 as 


Compared with 


Compared with 


1902 


1903 


9 


13 


12 


9 


G 


5 


10 


s) 


9 


1 


3 


- 


4 


2 


1 


1 


1 


- 


1 


- 


1 


- 


57 


33 



Under 85, . 
$5 but under $10, 
$10 but under $15, 
$15 but under $20, 
$20 but under $25, 
$25 but under $30, 
$30 but under $35, 
$35 but under $40, 
$45 but under $50, 
$60 but under $65, 
$70 but under $75, 

Totals, . 



There Avere increases in .57 industries and decreases in 33.. 
For the 57 industries shoAving increased yearly earnings the 
yearly advance for each employee was $17.50 ; for the 33 in- 
dustries showing decreased yearly earnings, the yearly decrease 
for each emploj'ee was $9.77. As the number of days in oper- 
ation in 1903, on the average, was 293.09 or very nearly 49 
working Aveeks of six days each, the averar/e iveekly advance 
for the emploj^ees in 57 industries was 36 cents, and the average 
iveehly decrease for the employees in 33 industries was 19.9 
cents. 

The figures just presented are based upon the average actual 
yearly earnings of all employees, including men, Avomen, young 
persons, and children. 

We next present a table shoAving the average actual'yearly 
earnings of adult males, in all industries, for the years 1899- 
1903. 



Number 
of Establish- 
ments 
Considered 



Average 
Actual Yearly 

Earnings 
of Adult Males 



Number of 
Days in Oper- 
ation 



Proportion 

of 

Business 

Done 



1899, 
1900, 
1901, 
1902, 
1903, 



4,740 
4,645 
4,696 
4,658 
4,673 



$523.34 
5.30.82 
542.23 
.55i.66 
.568.06 



294.14 
290.43 

292.78 
296.09 
293.09 



66.21 
66.65 
68.09 
70.20 
70.25 



No. 15.] THE CAUSES OF HIGH PRICES. 



127 



We bring the preceding table into a form in ^shicli it 
may be more easily understood by showing the number of 
weeks worked and the average actual weekly earnings. The 
table is not cumulative ; that is, we cannot say the average 
yearly earnings in U)08 were $44.72 more than in 1890, 
for in 1891* the returns were from 4,740 establishments with 
a certain number of employees, while in 1903 only 4,673 
establishments are represented with a varying number of em- 
ployees. 



Average 
Actual Yearlj' 

Earnings 
of Adult Males 



Number of 

Weeks Worked 

(6 days each) 



Avorase 

Actual Weekly 

Earnings 



189y, 
1900, 
1901, 
1902, 
1903, 



$523.31 
530.82 
542.23 
5.52.66 
568.06 



49.0 

48.4 
4S.8 
49.3 
48.8 



$10.68 
10.97 
11.11 
11.21 
11.64 



We give next a table, for the Cotton Goods industry, cover- 
ing the period from 1889 to 1903, and showing for each year 
the average annual industry product, the average actual yearly 
earnings, the percentage of yearly earnings of industry prod- 
uct, the average capital invested per employee, and the per- 
centage on capital required to pay yearly earnings. 

Cotton Goods. 



Average 
Annual In- 
dustry 
Product per 
Employee 



Average 
Actual 
Yearly Earn- 
ings 



Percentages 

of Yearly 
Earnings of 

Indus- 
try Product 



Average 

Capital 

Invested per 

Employee 



Pf-rcentages 

on Capital 

required 

to pay Yearly 

Earnings 



1889, 
1890, 
1891, 
1892, 
1893, 
1894, 
1895, 
1896, 
1897, 
1898, 
1899, 
1900, 
1901, 
1902, 
1903, 



$548 
535 
523 
594 
554 
483 
544 
469 
461 
505 
532 
643 
530 
606 
600 



$328 
335 
344 
346 
344 
320 
329 
330 
335 
323 
332 
363 
364 
382 
393 



59.94 
62.58 
65.81 
58.19 
62.02 
66.07 
60.44 
70.29 
72.65 
63.96 
62.39 
.56.39 
68.63 
63.02 
65.55 



$1,,5.57 
1,628 
1,641 
1,628 
1,616 
1,671 
1,4.55 
1,449 
],.397 
1 ,.383 
1,426 
1.410 
1,415 
1,3.59 
1,381 



21.10 
20.. 56 
20.97 
21.23 
21.26 
19.18 
22.60 
22.75 
23.97 
23.35 
23.28 
25.72 
25.71 
28.10 
28.48 



In 1889, in the cotton mills of this State, each operative 
turned out an average annual industry product (value of goods 
less cost of stock used) of $548 ; of this industry product each 



128 STATISTICS OF LABOR. [Pub. Doc. 

operative received $328 or 59.94 per cent of the value created 
b}^ his labor. His employer was obliged to invest $1,557 in 
money, per employee, which investment enabled the operative 
by his labor to create an industr}^ product worth $548. In 
order to pa}^ the o})erative his yearly earnings the employer 
had to clear 21.10 per cent on his investment. 

In 190o conditions in the industry showed a material change. 
The average annual industry product advanced from $548 to 
$600, while average actual yearly earnings were $393 as against 
$328. 

The percentage of yearly earnings of industry product was 
65.55 instead of 59.94. The average capital invested })er em- 
ployee became $1,381 as against $1,557, but the percentage on 
capital required to pay yearly earnings was 28.48 instead of 
21.10. Any two years in the table may be compared in a 
similar manner. 

Cost of Living. 
Cost of living is a variable amount dependent upon size of 
famil3% age of members, place of residence, purchasing facilities, 
and very largely upon individual or collective tastes or require- 
ments. The cost of living of two families of the same size with 
equal incomes may vary materially ; one family may close the 
year in debt, the other with a balance in the bank. One may 
purchase the best of eveiything, while the other is satisfied with 
medium or even low grades. Each family becomes a problem 
as regards cost of living, and it does not solve a hundred prob- 
lems to add them together and make one of them. Statistics 
of cost of living are valuable when grouped and compared with 
classified incomes. From such statistics we obtain the amounts 
paid for food, rents, clothing, fuel, light, and other items of 
household outlay. In them, however, we find no reliable indi- 
cation of financial condition. When the budgets give income, 
debt or savings can be determined, but cost of living figures, 
in themselves, are not reliable indications of increase or decrease 
in prices. A man may spend $500 on his family one year and 
$750 the next, but this marked increase of 50 per cent may 
have been the result of a larger income and a higher standard 
of living, and influenced in no way by the ruling prices of 
family necessaries. 



No. 15.] THE CAUSES OF HIGH PRICES. 129 

Prices. 
Prices of the " necessaries of life" should be exclusively for 
those items used in and by the famih'. As faniily purchases 
are made almost entirely from retail dealers, retail quotations 
are the only ones statistically applicable to the case. In deter- 
mining numerical and percentage increases and decreases the 
same grades should be considered and the same quantities ; that 
is, comparisons should not be made between pounds and bar- 
rels, and quarts and gallons. The quotations should be numer- 
ous and drawn from as large an area as possible in order to 
overcome, as far as possible, marked local inthiences. 

C03[PARI80NS OF WaGES AND CoST OF LlVIN(4. 

As i)reviously stated, and illustrated, such comparisons are 
of doubtful, if any, value. Both factors in the comparisons 
are variable in themselves, and comparisons of such variable 
factors cannot produce fixed, reliable results. 

Coj\rPAr.isoNS of Earnings and Prices. 
What a man actually receives in money for his services is a 
positive amount ; what he actually has to pay for certain 
articles of family use is equally positive. If his expenditures 
for the necessaries of life are accurately computed for a week, or 
month, or year by giving to each its iwopev Jinan ciaJ " weight '" 
or influence (not the pound to pound l)asis of consumption, 
which is fallacious) then the result, either in numbers or per- 
centages, can be properlj^ compared with actual earnings, and 
the actual increases or decreases in earnings and prices can be 
arrived at in a legitimate statistical way, and be presented to 
the public in the form of comparative amounts or percentages. 

Future Work of the Bureau. 

We presented in Labor Bulletin No. 31 ([notations of prices 
for 17 cities in the State. In the fall of 1904 comparative 
(juotations for the same articles in the same cities will be ob- 
tained by our agents. 

In Part I of this re})ort actual weekly earnings are given in 
nianv liranches of employment. In the fall similar returns 



130 STATISTICS OF LABOE. [P. D. No. 15. 

will be gathered, and the Bureau will then be in a position to 
present comparable figures relating to earnings and prices for 
separate periods. 

Conclusion. 

The action of earnings and prices is niutuall}^ reflex. If 
the workingnian toils for less hours and gets more money for 
his lal)or, the costs of production and distribution are increased 
and manufacturers and dealers advance prices. 

Theoretically and practically the more mone}' a man has the 
more he should pay in taxes. The average workingman's per- 
sonal property is within the exemption, but many own or have 
oquit}' in real estate. The dealers charge more for meats, 
(lour, and other necessaries ; the toMns, cities, and the State 
join hands by raising the valuation and increasing the tax rate ; 
then the real estate owners, paying more for materials and labor 
and higher taxes, put up rents. 

The rich man has always found fault with the high taxes, but 
eventually pays them. Higher prices are the poor man's taxes. 
Like the rich man he can find fault with existing conditions and 
the law makers Avhom he holds responsible for them, but, like 
the rich man, in the end he must pay. Scarcity will raise some 
prices, combinations will advance others ; over-production, or 
under-consumption which is the same thing, will bring down 
prices on many articles. Industrial attrition will finally regu- 
late the wage question, and then prices, wages, and cost of 
production will reach a normal standard once more — and this 
normal standard will give a just return to all who make, sell, 
distriliute, or use the manifold products of industry. 



M ' 



PUBLICATIONS OP THE 



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Tlie following issues of the annual reports of this Department remain in print and will 
1)6 forwarded when requested, upon receipt of the price set against each Part and bound, 
to cover cost of mailing. 



Annnal Report on tlie Statistics 
of* liabor. 

1893. Bound in cloth, postage 15 cents. 
This report contains a special report on 
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the year 1893; this latter will be mailed 
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1894. Bound in cloth, postage 15 cents. 
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1893. Bound in cloth, postage 2.5 cents. 
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Graded Weekly Wages, 1810-1891, first part 
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1895 (postage 5 c). 

1896. Bound in cloth, postage 15 cents. 
Contains, I. Social and Industrial Changes 
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II. Graded Weekly Wages, 1810-1891, second 
part (postage 10 c.) ; III. Labor Chronology 
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1897. Bound in cloth, postage 15 cents. 
Contains, I. Comparative Wages and Prices, 
1860-1897 (postage 5 c.) ; II. Graded Weekly 
Wages, 1810-1891, third part (postage 10 c.) ; 

III. Labor Chronology for 1897 (postage 
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1898. Bound in cloth, postage 25 cents. 
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part (postage 15 c.) ; ill. Labor Chronology 
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1899. Bound in cloth, postage 15 cents. 
Contains, I. Changes in Conducting Retail 
Trade in Boston Since 1874 (postage 5 c.) ; II. 
Labor Chronology for 1899 (postage 10 c). 

1900. Boimd in cloth, postage 25 cents. 
Contains, I. Population of Massachusetts in 
1900; II. Co-operative Industrial Insurance 
(postage 10 c.) ; III. Graded Prices, 1816- 
1891 (postage 15 c.). 

1901. Bound in cloth, postage 15 cents. 
Contains, I. Labor Chronology for 1900 
(postage 5 c); II. Labor Chronology for 
1901 (postage 5 c); III. Prices and Cost of 
Living, 1872-1902 (postage 5 c.) ; IV. Labor 
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1903. Bound in cloth, postage 15 cents. 
Contains, I. Report to the Legislature; II. 
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Wages and Salaries (postage 5 c.) ; IV. Sex 
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1903. Bound in cloth, postage 15 cents. 
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III. Social and Industrial Condition of the 
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Labor and Industrial Chronology for 1903 
(postage 5c.). 

Annual Report on tbe Statistics 
of Manafactnree. 

Publication begun in 1886, but all volumes 
previous to 1892 are now out of print. Each 
volume contains comparisons, for identical 
establishments, between two or more years 
as to Capital Devoted to Production, Goods 
Made and Work Done, Stock and Materials 
Used, Persons Employed, Wages Paid, 
Time in Operation, and Proportion of Busi- 
ness Done. The Industrial Chronology 
which forms a Part of each report up to 
and including the year 1902 presents an In- 
dustrial Chronology by Towns and Indus- 
tries. Beginning with the year 1903, the 
Industrial Chronology is combined with 
that for Labor under the title of Labor and 
Industrial Chronology and forms a part of 
the Annual Report on the Statistics of 
Labor. Beginning with the year 1904, the 
Annual Report on the Statistics of Manu- 
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The volumes now remaining in print are 
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1898 (15 c.) ; 1893 (15 c.) ; 1894 (15 c.) ; 
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1900 (10 c); 1901 (10 c), contains also a 
five year comparison on Manufactures, 
1895-1900; 1908 (10 c.) ; 1903 (10 c.) . 

liabor and Industrial Citronolosy. 

Since 1899 those parts of the reports on 
the Statistics of Labor and Statistics of 
Manufactures relating to these subjects 
have been bound together in response to a 
demand for the same; 1901 and 1908 are 
the only ones now remaining in print 
and will be forwarded to one address, two 
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LIBRARY OF CONGRESS 



013 716 169 2 • 




PUBLICATIONS OF TH. 



BUEEAU OF STATISTICS OF LAEOE. 



The following issues of the Labor Bulletins of this Departxaent remain in print and will 
be forwarded upon receipt of five cents each, to cover cost of mailing. 



I^abor Bnlletins. 

These Bulletins were first issued quar- 
terly but are now published six times a year. 
They contain a large variety of interesting 
and pertinent matter on the Social and lu- 
dusti'ial Condition of the Workingman, to- 
gether with leading articles on the Condition 
of Employment, Earnings, etc. The follow- 
ing numbers are the only ones now remain- 
ing in print and will be forwarded upon 
receipt of five cents each to cover the cost 
of postage. 

No. 10, April, 1899. Labor Legislation 
of 1898 — Trade Unionism in Massachusetts 
prior to 1880 — Contracts with Workingmen 
upon Public Work — Foreign Labor Dis- 
turbances in 1897 — Quarterly Review of 
Employment and Earnings : Ending April, 
1899 — Editorial. 

No. 11, July, 1899. Certain Tenement 
Conditions in Boston— Quarterly Review of 
Employment and Earnings: Ending July, 
1899. 

No. 14, May, 1900. Free Public Em- 
ployment Offices — Employment and Unem- 
ployment in the Boot and Shoe and Paper 
Industries — Legislation affecting Hours of 
Labor — Quarterly Review of Employment 
and Earnings: Ending April 30, 1900 — Sta- 
tistical Abstracts. 

No. IS, August, 1900. Household 
Expenses— Comparative Occupation Sta- 
tistics for the Cities of Fall River, New 
Bedford, and Taunton — List of Subjects 
pertaining to Labor considered in the Latest 
Reports of American Statistical Bureaus — 
Massachusetts Labor Legislation in 1900 — 
Quarterly Review of Employment and Earn- 
ings : Ending July 30, 1900. 

No. 17, February, 1901. Occupa- 
tions of Residents of Boston: By Districts 

— Unemployraentin Boston Building Trades 

— Conjugal Conditiou of Women employed 
in Restaurants — Comparative Earnings in 
Five Leading Industries — Resident Pupils 
in Public and Private Schools in Boston- 
Statistical Abstracts. 

No. 31, February, 190S. Physically 
Defective Population in Massachusetts in 
Relation to Industry — Distribution of the 
Industrial Population of Massachusetts — 
Compulsory Arbitration in New South Wales 

— Quarterly Record of Strikes — Statistical 
Abstracts. 

No. 27, August, 1903. Aliens in In- 
dustry—Immigration Act of the United 



States — Labor Day — Labor Legislation in 
1903 — Quarterly Record of Strikes — Statis- 
tical Abstracts. 

No. 29, January, 1904. Eight-hour 
Day — Licensing of Barbers — Early Clos- 
ing and Half-holiday Laws of Austi-alasia 

— Industrial Studies, Proprietors— Palaces 
for the People — Quarterly Record of Strikes . 

No. 30, DIarcli, 1904. National Trades 
Association — Massachusetts-bom Living in 
Other States — Industrial Betterments— A 
Partial Religious Canvass of Boston — Cur- 
rent Comment on Labor Questions: Child 
Labor — Bi-monthly Record of Strikes and 
Lockouts — Prices of Certain Articles of 
Food in Toronto, Canada, and Massachusetts 

— Industrial Agreements — Labor Legisla- 
tion in Other States and Foreign Countries 

— Recent Legal Labor Decisions — Statisti- 
cal Abstracts. 

No. 31, May, 1904. City Labor in 
Massachusetts — Review of Employment 
and Earnings for Six Months ending April 
30, 1904 — Average Retail Prices in 17 Cities 

— Bi-monthly Record of Strikes and Lock- 
outs—Editorial, Rev. Jesse H. Jones — In- 
dustrial Agreements — Current Comment on 
Labor Questions: Open and Closed Shop — 
Labor Legislation in Other States and 
Foreign Countries— Recent Legal Labor 
Decisions — Excerpts Relating to Labor, In ^ 
dustrial. Sociological, and General Matters 
of Public Interest — Statistical Abstracts. 

No. 32, July, 1904, Cliild Labor in 
the United States and Massachusetts — Net 
Profits of Labor and Capital — The Inherit- 
ance Tax — Absence after Pay Day — Pay 
of Navy Yard Workmen— Labor Legisla- 
tion in Massachusetts for 1904 — Industrial 
Agreements — Current Comment on Labor 
Questions: Eight-hour Workday — Recent 
Legal Labor Decisions — Excerpts Relating 
to Labor, Industrial, Sociological, and Gen- 
eral Matters of Public Interest — Statistical 
Abstracts. 

No. 33, September, 1904. Labor 
and Education, by William J. Tucker, D.D., 
LL.D., President of Dartmouth College — 
Nigiit Work by Women and Minors in Tex- 
tile Mills — Excerpts Relating to Labor, In- 
dustrial, Sociological, and General Matters 
of Public Interest — Industrial Agreements 

— Current Comment on Labor Questions: 
Immigration — Recent Legal Labor Deci- 
sions—Trade Union Directory for 1904 — 
Statistical Abstracts. 



